‘A national crisis’: Retailers urge government to reduce cost of cigarettes amid gang wars

Local retailers who refuse to sell $15 illegal cigarettes have blamed the federal government for fuelling the black market.

EXCLUSIVE

Convenience stores and petrol stations across Australia are urging the government to lower cigarette prices over fears the violent tobacco wars are turning into a “national crisis”.

Last week, yearly financial results were released from two of the nation’s biggest petrol station owners – Ampol and Viva Energy – and showed that local stores are being smashed by the illegal market, with both reporting major slumps for the year.

The federal government has vowed to continue to increase the price of cigarettes by five per cent year on year with the average packet now costing $50.

But with an illegal packet now costing around $15, the divide is greater than ever before.

Australian Association of Convenience Stores chief executive Theo Foukkare said local retailers are at breaking point, with the divide now directly fuelling one of the nation’s most terrifying gang wars in recent history.

Two shops were damaged by a suspicious fire believed to be linked to Victoria’s tobacco wars after a Christmas attack in Croydon’s Main St. Picture: Supplied

Last year, a tobacco store in Morwell, Victoria was also destroyed by fire Picture: Facebook

In just the last 18 months, police believe around 200 shops have been destroyed by gang members as various groups attempt to gain control of the lucrative market.

Mr Foukkare said retailers – even those doing the right thing and not selling illegal products – are more scared than ever before about being caught in the crossfire.

In February, a “completely innocent” 27-year-old woman in Melbourne became the first fatality of the tobacco wars in a case of mistaken identity.

CCTV of an arson attack that claimed the life of 27-year-old Hoppers Crossing woman Katie Tangey in January. Picture: Victoria Police

Katie Tangey was identified as the woman killed in a suburban house fire in Melbourne. Picture: Supplied

He said that a few years ago, the tobacco wars were concentrated in metropolitan Melbourne and Sydney, however, are now being fought in areas such as Bundaberg, Rockhampton and Adelaide as the market becomes increasingly desirable.

“The biggest concern is about the safety of our staff. They are trying to go to work and earn an income to be able to live their life and support their families. It’s a real concern, a really big concern,” Mr Foukkare said.

“Genuinely we feel this is a national crisis.”

Local stores struggling amid gang wars

Mr Foukkare also said legal retailers are also losing out the sales of others products in their stores are the illegal market takes over.

Sales across the petrol and convenience channel fells by $1.5 billion in the past five years alone.

“We’ve lost those customers not only for their tobacco sales, but we’ve also lost them coming in, buying a drink, a coffee, a sandwich. We’re losing that customer to illegal operators,” he said.

“And what makes it extremely frustrating is the fact that these stores continue to operate in plain sight next door to them, around the corner from them.”

A tobacco store in High Street, Preston which was destroyed by fire. Picture: Jake Nowakowski

Mr Foukkare said the federal government needs to freeze any future tobacco excises first before reducing the gap between the legal and illegal market.

“The government can’t put their head in the sand and say I’ve got to put the price up because it stops people smoking, because we know that’s not happening now,” he said.

“They are dealing with a tidal wave and the black market in maybe a year and a half or two years, will be the largest supplier of tobacco products to Australians.

“These guys aren’t paying taxes. These guys are running the gauntlet and they’re selling unregulated, dangerous products to everyday Australians.”

A tobacco store in Adelaide was destroyed by fire in December. Picture: Alan Barber

Government’s inaction ‘playing into the hands of organised crime’

James Martin, a senior lecturer in criminology at Deakin University, said the lowering or halt of any further increases on tobacco products is “necessary” to stop the expansion of the black market.

“[Increasing tobacco taxes] – along with the ongoing ban on consumer vaping products – is precisely the worst thing that the government can do and plays straight into the hands of organised crime,” Mr Martin said.

“Every tax increase on legal tobacco makes black market tobacco more attractive and puts more money into the hands of crooks.

“Further expanding the black market is also bad for public health as it ensures the market is flooded with extraordinarily cheap cigarettes. It’s bad news all around.”

Originally published as ‘A national crisis’: Retailers urge government to reduce cost of cigarettes amid gang wars