Mapped: 500+ illicit smoke shops across Sydney revealed

Hundreds of shops across NSW are peddling illegal cigarettes on the black market, making a mockery of government bans, with experts blaming poor enforcement and excise policy failures for the spike. Search our interactive tools here.

The number of tobacconists peddling illegal cigarettes have continued to explode across NSW, including in some of the city’s most affluent areas, with experts saying the government’s tobacco excise no longer works as they push for even tougher penalties.

Investigations from big tobacco firm Philip Morris International found more than 570 retailers across the state are selling illegal tobacco, with 33 sellers located in the Sydney CBD, followed by 16 in Liverpool and 14 in both Blacktown and Campsie.

The investigation found there was at least one retailer selling illegal tobacco in 179 metro suburbs and towns, with up to 12 retailers counted in inner-city areas such as Surry Hills and Darlinghurst. The suburb of Wyong on the Central Coast, which only has about 4500 residents according to the 2021 Census, is home to nine illegal outlets.

As part of their investigation, Philip Morris International sent their team of mystery shoppers to 1140 tobacconists and convenience stores across NSW in the last year and found people could buy illegal products from half of the retailers. The Sunday Telegraph then visited more than 50 stores across Sydney to confirm these sales.

This comes as economists warn the Federal government’s tobacco tax policy has ceased to be effective due to smokers turning to illegal products, fuelling organised crime.

Economists warn the excise policy has fuelled the black market. Picture: Australian Border Force

Independent economist Saul Eslake said a tipping point has been reached where the rewards from smuggling illegal tobacco clearly outweigh the risks.

“The crooks obviously think the probability of getting caught is pretty small or if they do the fines are just the cost of doing business,” he said.

The tobacco excise is designed to increase prices over time to make products less affordable, steadily reducing consumption.

But last month’s federal budget revealed the predicted tax intake from the tobacco excise had crashed 18.5 per cent in 2025-26 as sales go underground, with the illegal trade now estimated at more than $5 billion a year.

The Australian Border Force (ABF) and partners have seized millions of cigarette sticks, but calls are mounting for tougher state-based enforcement. Picture: Australian Border Force

Economist Chris Richardson, who on budget night referred to the tax as an “epic policy fail,” said crooks are reaping the benefits of a lucrative black market with fewer risks than hard drugs due to inadequate policing.

While the Australian Border Force (ABF) and the Australian Taxation Office (ATO) are responsible for cracking down on illegal tobacco on a federal level, in NSW only 24 Health department inspectors are responsible for bringing rogue retailers to heel.

Australian Association of Convenience Stores chief executive Theo Foukkare, whose members sell excised, legal cigarettes, said leaving enforcement up to a handful of health inspectors in NSW failed to deter organised crime.

Mr Foukkare called on the NSW government to copy the hard line enforcement laws in South Australia, where the fines for selling illegal tobacco are up to $4.2m for individuals, $6.6m for businesses, and stores can be closed for between 72 hours to six months – all overseen by a 20-officer strong task-force.

Illegal cigarettes are still being sold at hundreds of retailers despite crackdown efforts. Picture: Australian Border Force/Supplied

In comparison, fines for individuals in NSW are up to $110,00 for individuals and $220,000 for businesses since the government introduced its crackdown reforms late last year.

“The unfortunate reality is the availability of these illegal products in NSW and all around the country is bigger than ever. We believe there are now more than 3000 stores openly breaking the law selling these illegal products in plain sight, they even advertise it on the front of their stores, through letterbox drops and online in communities,” Mr Foukkare said

“The fines are still too low, the enforcement responsibility remains with health inspectors, landlords continue to be kept in the dark, and there is no dedicated task-force set up (in NSW) to dismantle this crime.”

Despite the criticism, NSW Health Minister Ryan Park said he believed enforcement levels were “strong”.

A warehouse full of seized tobacco and vapes in Marrickville, stopped from making its way into stores across the state. Picture: Jonathan Ng

“In 2024, NSW Health conducted over 1,900 retail inspections across the state, issuing 437 penalty infringement notices with fines totalling $718,300, and handling 21 prosecutions in relation to tobacco and illegal vaping goods,” he said.

A Federal government spokesman said in the last six months, the ABF had seized more than 1.3 billion cigarettes, or about 650 cigarettes for every single one of the country’s two million smokers.

However, states are expected to pull their weight.

“We want to see enforcement activity at the state level increase, and we’re resourcing states to undertake more prosecutions,” the spokesman said.

“We want to see these gangs put in the dock as well as having their criminal profits confiscated.”

Do you have a story for The Daily Telegraph? Message 0481 056 618 or email [e-mail]