‘Absolute disaster’: Crime gangs to force big tobacco companies out of Australian market in three years, experts warn
Australia’s tobacco market is facing complete criminal takeover, with crime syndicates on their way to controlling 100 per cent of the country’s tobacco market in the next three years, according to leading experts.
Big tobacco companies could be driven out of the country, handing organised crime a golden ticket to market domination within just three years.
Tobacco industry figures estimate major legal cigarette manufacturers will soon exit the Australian market if drastic changes are not made to combat the underground trade.
Organised crime is estimated to be already profiting from a 64 per cent market share of all cigarettes sold across the country, but industry experts expect that figure to climb.
If it does, the Herald Sun has been told that Phillip Morris, British American Tobacco and Imperial Brands will have no choice but to cease sales in Australia within the next 36 months.
That would grant organised crime complete control of the nation’s tobacco trade.
“It wouldn’t be commercially viable,” Australian Association of Convenience Stores chief executive Theo Foukkare said.
“If we maintain a 50 per cent decline, which is what we’re experiencing right now, there won’t be a legal market for the three major tobacco companies.
“They won’t be left with any choice other than to exit the market.”
Mr Foukkare said the consequences of organised crime controlling the entire tobacco trade would be dire.
He said children and teenagers would have no issues with purchasing packs of smokes that would not be plastered with health warnings.
“Underage access will explode because there’ll be no control over the availability based on age,” he added.
“They won’t care, they’ll sell it to them (children). Tobacco control policy will be non-existent.
“We’re going backward. It would be an absolute disaster.”
Another senior tobacco industry source agreed that the legal market could “disappear entirely within three years”.
“Time is quickly running out,” he said.
“The federal government will lose billions more, criminals will take total control with enforcement agencies overwhelmed and public health will pay the price for a market with no rules.”
One police source said it was unlikely big tobacco companies taking a hit would generate too much sympathy but the situation was also causing pain for retailers.
He said the boom in illicit sales had slashed the already thin margins of family-operated stores while simultaneously enriching organised crime figures.
“If they’re not making any profit, why would they (tobacco companies) stay? Why the f--- would you want to sell it?” the officer said.
Nationals MP Tim McCurdy also agreed big tobacco had a maximum of three years at the current rate of those turning to the black market.
“At the current pace, legal and regulated tobacco operators may struggle to remain in the Australian market within three years,” he said.
Last month police outlined the cash profits allegedly flowing into the Hamad syndicate from its West Australian arm.
Kazem Hamad’s younger brother Maytham was charged after an investigation into allegations almost $10m in cash was transferred from Perth to Melbourne via the post.
It is alleged $1.7m was moved in nine packages in August and September.
Another 45 parcels totalling $8m and containing between $155,000 and $220,000 each were allegedly sent before that.
Those sums raise questions about the kind of tax-free profits being pulled from Melbourne, where there is a much greater number of allegedly illicit shops.
Police said they seized $1m in luxury items, including two Lamborghini sports cars and designer fashion items, at the Mount Pleasant home of Maytham as part of the inquiry.
A new tobacco enforcement regime is expected to come into place in Victoria in February 2026 but some retailers and police fear it will be ineffective.
They say the history in recent years of seizing smokes and vapes from shops without being able to shut them down was futile because it is alleged Hamad and others were so easily able to restock within days.
“Without closure powers, everything else is a waste of time,” an investigator said.
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Originally published as ‘Absolute disaster’: Crime gangs to force big tobacco companies out of Australian market in three years, experts warn
