By Carla Jaeger, Rachel Eddie and Chris Vedelago
A licensing scheme to tackle the booming illicit tobacco trade will bring Victoria into line with the rest of Australia, after more than 100 firebombings targeting cigarette shops around the state.
Premier Jacinta Allan laid out the details of the scheme on Tuesday with a bill to be brought to the Victorian parliament, eight months after promising the change in March and over two years since the government received reform recommendations.
Victoria’s illegal tobacco trade has resulted in more than 100 firebombings, including this attack in Sydenham in August.Credit: Nine
Along with the tobacco business licensing scheme that includes a fit-and-proper persons check, the government plans to establish a tobacco regulator with dedicated inspectors to enforce the new regime. Police powers would also be expanded for broader search and seize powers.
A person caught selling illicit tobacco would face fines of more than $355,000 or a maximum 15 years in jail, while businesses could be fined as much as $1.7 million.
The new penalties will roll out once the act comes into effect, if the bill passes, and the government plans for the new licensing scheme to begin mid-next year.
Casino, Gambling and Liquor Regulation Minister Melissa Horne would not outline a time frame for establishing the tobacco regulator or recruiting inspectors. She said structuring the system was complex and would take time.
But police sources have previously told The Age that it was likely the enforcement regime would not be fully operational until the start of 2026 because it would require creating an entire regulator from scratch.
More than 1300 tobacco shops are believed to operate across Victoria, with more opening. Since March 2023, there have been about 120 arson attacks linked to a turf war over control of the illicit tobacco trade.
The new laws do not cover the regulation of vapes, which are governed by federal authorities. However, police will be able to seize illegal vaping products under expanded powers.
Deakin University criminologist James Martin believes the changes would do little to address the supply and demand of nicotine.
“Our focus on enforcement and penalties is insufficient because it doesn’t deal with that supply and demand,” Martin said.
“A lot of it is really just reactive, Band-Aid solutions that are creating more harm.”
While Martin agreed tobacco should be licensed – alongside any addictive product – he was concerned the proposal did nothing to decrease the demand and wouldn’t help police pursue organised crime groups responsible.
He argued those copping the penalties could be business owners who were pressured into the black market.
“What happens when we start locking up family-owned business owners?”
Premier Jacinta Allan and Casino, Gambling and Liquor Regulation Minister Melissa Horne.Credit: Joe Armao
Horne said it would be “guesswork” to estimate how many tobacco retailers there were in Victoria and couldn’t say how many inspectors the regulator would need. The inspectors would have search and seize powers and issue penalties.
While acknowledging inspectors’ work could involve interacting with dangerous individuals, Horne suggested they would operate similarly to liquor licence inspectors, who work in pairs.
The tobacco retail industry has been infiltrated by organised crime gangs that have for more than 18 months waged a battle for control of the market using arson attacks against rival-controlled shops, and extorting independent operators. Several unsolved shootings and murders have also been linked to the violence.
The government was advised to introduce a licensing scheme more than two years ago by Better Regulation Victoria.
Police at the scene of an arson attack on a tobacco store in Hadfield last year.Credit: Chris Hopkins
It took until March this year for the premier to announce the Victorian government would adopt the recommendation.
Police Minister Anthony Carbines said police could present their intelligence to the new regulator to refuse an operating licence.
“We can strike out and keep out those in organised crime that try to profit from this activity. This is about destructing their business model,” Carbines said.
Victoria Police Chief Commissioner Shane Patton told ABC radio the new authorised officers would perform the daily regulatory work while police would be involved where operations intersected with organised crime.
He said more than 200 warrants had been executed, and 95 people had been arrested since Taskforce Lunar was established.
“We’re doing everything we can. Can I guarantee it will stop overnight? No. But what I can guarantee is we’re still going to be holding people to account,” Patton said.
“I am hopeful it will get better, yes I am. How long that will take? I don’t know.”
The premier acknowledged anecdotal evidence that taxation – which helps counter the public health cost of smoking and aims to discourage smoking – might have actually pushed people towards the illegal market.
But Allan said this was a matter for the federal government, as was the enforcement of imported products.
“You’ve got to stop this product at the border,” she said.
Australia’s tobacco tax – one of the most expensive in the world – has driven the price of cigarettes to at least $50 a packet. On the black market, The Age found some tobacconists selling packs of illegal cigarettes for as little as $13.
Australian Association of Convenience Stores chief executive Theo Foukkare welcomed the new scheme and said community safety depended on it.
“Up until now, anyone could sell tobacco in Victoria without a licence and not be held accountable for it, which we believe is a big contributing factor to the out-of-control tobacco turf war in Victoria,” Foukkare said.
Opposition consumer affairs spokesman Tim McCurdy slammed the government for taking so long and questioned when Victorians could expect the “final product”.
“We want boots on the ground [by the] middle of next year because there’s more tobacco shops that are going to burn week in, week out,” McCurdy said.
Libertarian MP David Limbrick said tougher penalties would only encourage violence and extortion. He said the federal government needed to reduce tobacco excise.
“Cheap tobacco is being sold whether the government likes it or not. Tobacco at the moment is regulated by organised crime,” Limbrick said.
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