Federal government under fire for plan to raise price of cigarettes

The federal government has been accused of “pouring petrol on an already raging fire” with plans to raise the price of legal cigarettes this weekend, as the illicit tobacco turf wars rage on.

The federal government has been accused of “pouring petrol on an already raging and out-of-control fire” with plans to raise the price of legal cigarettes this weekend.

Australia already has the world’s most expensive cigarettes, sending record numbers to the black market, and experts say a 6.8 per cent hike on Sunday will only exacerbate the violence between crime syndicates.

It comes as a report into tobacco and vaping regulation is expected to be tabled to state parliament on Thursday.

The Herald Sun has been told the Public Accounts and Estimates Committee was “ordered” to cut its inquiry short and deliver the report ahead of the November 30 deadline due to state government inaction on the issue being highlighted by this masthead.

Experts say raising the price of legal cigarettes will only exacerbate the violence between crime syndicates.

This Sunday also marks the day Victoria becomes the only state or territory in the country without a tobacco licensing scheme. That will be a key recommendation of this latest report, after the state government ignored similar advice from Better Regulation Victoria in May 2022.

Sunday’s price hike would only put service station workers further into the firing line as they fall victim to violent crime sprees targeting legal smokes.

MGA Independent Businesses Australia chief executive David Inall said his workers would continue to be subjected to horrific and dangerous armed robberies.

“Our members live in fear as their businesses continue to be targeted by violent cowards who rob their stores and assault staff, typically with the objective of stealing legal tobacco for on selling into the illegal market,” he said.

“This endless series of extraordinary tax hikes in an attempt to force smokers to quit is simply pouring petrol on an already raging and out of control fire,” Dr James Martin, a senior criminologist at Deakin University, said.

“It now constitutes prohibition in all but name. It’s an extraordinary multi-billion dollar gift for organised crime and it is a major crime problem of the government’s own making,” he said.

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After the price hike a packet of legal 20 Marlboro cigarettes will cost close to $60. Picture: NewsWire

Australian Association of Convenience Stores chief executive Theo Foukkare labelled the price hike a “tax grab”.

The decrease in sales coincides with “record nicotine levels” found in waste water analysis reports.

“The state is burning as the illicit tobacco turf wars rage on … because of this shortsighted tax grab,” he said.

“Jacking up the tax on regulated tobacco and branding it as a move to deter people from smoking is pure insanity.

As well as a five per cent excise increase and a 1.8 per cent indexation increase on Sunday, there will also be an yet-to-be determined indexation rise in March and an additional five per cent tax hike in September next year.

This means a packet of legal 20 Marlboro cigarettes will cost close to $60. A similar packet of illicit tobacco can cost as little as $15.

Mr Foukkare projected the ongoing turf war would “explode” in coming months.

“(It) will only continue to put innocent lives at risk,” he added.

Dr Martin, who has given evidence at both state and federal tobacco inquiries, agreed.

“If you were one of these crime syndicates you would be feeling fantastic right now,” he said.

“This is just going to push more market share their way. You would be cheering, absolutely cheering.

“It’s a highly retrograde step. It will stimulate even more violence because their trade will be more valuable to fight over.”

Police at the scene of a firebombing in Hoppers Crossing this month. Picture: David Crosling

One person has been murdered and there have been several shootings linked to the illegal trade. There have also been more than 95 firebombings on businesses linked to the tobacco war in Victoria since March last year.

Police have identified more than 1200 shops selling illicit tobacco across the state.

“Increasing the tax on cigarettes is trying to send a signal to smokers to get them to quit by pricing them out of the market,” Dr Martin said.

“But the problem is, we’ve pushed this button so many times and as a direct result we’ve created this massive black market. Smokers are abandoning the legal market in droves.

“We’ve overdone those health interventions, particularly with tax increases, to the extent that we’ve got an illicit tobacco market selling cheaper products than we had 10 years ago.”

“Even the federal government had to write down their estimates from tobacco taxes from $15bn to $10bn this year. So much of the good work that was done is now being actively undermined by this out of control tobacco tax.”