Tobacco licence scheme in disarray as it is revealed inspectors won’t start enforcement until 2026

Retailers have slammed the state government for its “farcical” response to the tobacco black market as it’s revealed inspectors won’t be checking for illicit smokes until at least 2026.

Kazem ‘Kaz’ Hamad is one of the crime bosses fighting for control of the illicit tobacco market.

Dedicated inspectors will not be on the ground enforcing the tobacco licensing scheme for at least another year, the Herald Sun can reveal.

It comes as retailers warn there is mass confusion over the initiative, which is due to start on 1 July, with businesses left “completely in the dark” about how it will work.

The chief executives of Master Grocers Australia, the ­Australian Association of Convenience Stores, the Australian Lottery and Newsagents Association and Ritchies IGA – representing more than 14,000 stores nationally – have slammed the state government for its handling of retail licensing.

Despite legislation being passed in November last year, and the scheme set to be operational in five months, the Herald Sun can reveal licensing inspectors won’t be checking for illicit tobacco until at least 2026.

David Inall, CEO of MGA, said honest and law-abiding retailers had been left in the dark “yet again.”

“I’ve been in public policy for 32 years and in my view this scourge of illegal tobacco is the biggest policy failing of all that time,” Mr Inall said.

“The state government hasn’t engaged in any meaningful way because it doesn’t have any answers. It’s a complete mess.”

Tobacco wars have been raging across Melbourne for two years, with more than 100 stores torched.

He added: “The policy is apparently meant to start on July 1 this year but we are completely in the dark – there’s no enforcement, no budget that we know of and no department that sits behind it.

“Other states have moved much quicker. We don’t know how to apply for a licence, who we apply to, the cost or who is managing it. It’s farcical.”

Ben Kearney, CEO of ALNA, said he was part of a working group for two years before Queensland introduced its tobacco licence scheme but received “crickets” in Victoria.

“It’s ground zero in Victoria. Worst of the worst. But retailers’ voices are not being heard,” he said.

“We can already see giant red flags, such as there are no powers to close a store down for selling illicit tobacco. But the government has its fingers in its ears.”

Theo Foukkare, CEO of the AACS, said it was vital the scheme starts on 1 July and not a day later.

“It’s imperative that it comes in on that date and imperative that the state government uses all its resources to get the new regulatory body up this year,” he said.

“If it doesn’t come in until some time in 2026, the black market and associated crime we’ve seen will keep running rampant,” he added.

David Inall says retailers have been left in the dark yet again. Picture: Yuri Kouzmn

And Fred Harrison, CEO of Ritchies IGA, said the state government was giving serious organised crime gangs a “free 18-month run” to advance their illicit trade.

“It’s ludicrous,” he said.

“Legitimate businesses have received no detail on what is happening but they’ve told criminals we won’t come after you for 18-months.

“It’s absurd. It defies logic.”

He added: “While Melbourne burns, the government fiddles.”

The cost of a licence is a major concern for retailers after the previous minister for introducing the scheme, Melissa Horne, said in December the government was looking at a “cost recovery model”, meaning retailers would pay a high fee in order to fund the entire operation.

“What’s the cost of the scheme? We have no idea,” Mr Kearney said.

“All we do know is the state government allowed this to get out of hand and now it will be up to legitimate retailers to pay for the policing of these criminals. But we won’t have inspectors until 2026, they won’t be able to close anyone down and we don’t even know if they’ll be going into any shops that hadn’t bothered applying for a licence. Seriously, you could not make this up.”

Mr Foukkare said he had been lobbying for retailers to pay a licence fee of around $450 and wholesalers $750, which would be in line with other states.

The state government hasn’t even decided how many inspectors it needs, instead saying that it will be dependent on the number of licence applications it receives.

There are no powers to close a store down for selling illicit tobacco. Picture: Jake Nowakowski

Insiders say it is hoped “boots will be on the ground in early 2026” but the government has given itself a hard cut off date of 1 July 2026.

Better Regulation Victoria recommended the state introduce a nicotine licensing scheme in May 2022.

Since March 2023 there have been more than 130 firebombings in the state as criminals such as Kazem ‘Kaz’ Hamad, Fadi Haddara and Dib and Hassan Barakat fight for control of the illicit market.

Victoria Police has arrested more than 80 people, executed more than 200 search warrants and seized more than $37m in illicit tobacco and related items.

Enver Erdogan, the minister for tobacco regulation, said they’ve introduced the “toughest laws anywhere in the country”.

“The regulator will provide strong regulation and oversight of the tobacco industry and prohibit those unsuitable to hold a licence from operating in the industry – we will have more to say on this soon,” he said.

“Work is happening to determine the licensing details, including fees – this will be done in consultation with industry and we’ll make sure that retailers are kept informed along the way.”

An industry expert said tough laws are useless without enforcement.

“The Victorian government boasts that their laws are the toughest in the country but laws without enforcement are next to useless,” an industry expert said.

“Issuing tobacco licenses with no regulator in place to administer them is Yes Minister on steroids.”

Originally published as Tobacco licence scheme in disarray as it is revealed inspectors won’t start enforcement until 2026