Out-of-control illegal tobacco trade run by organised crime has flourished in Victoria

A massive surge in the number of illicit tobacco stores in Victoria has sparked a series of firebombings and shootings as customers are warned they are “feeding the beast that is organised crime”.

Criminals set up 1000 illicit tobacco stores in Victoria in the years ­before firebombings and shootings erupted over market turf wars.

Detective Inspector Chris Murray, head of the arson and explosives squad, said the number grew 20-fold from 50 in less than five years.

The out-of-control illegal trade run by organised crime has flourished in a largely unregulated environment with no licensing regime.

Organised crime figures have run amok, reaping enormous profits from shops that frequently operate on a cash-only basis and are often sparsely stocked.

The illicit tobacco trade has flourished in recent years. Picture: David Crosling

Much of what they sell, including illegally grown loose tobacco called chop-chop, is not on display.

Inspector Murray said there could be no other commercial sector booming to the same ­degree as tobacco shops.

“What other businesses have proliferated this much?” he said. “There’s a lot of money to be made and it’s not legal money.”

The homicide squad is probing illicit tobacco links in last month’s South Yarra murder of career criminal Mohammed “Afghan Ali” Keshtiar.

Inspector Murray said other non-fatal shootings were also linked to the friction, along with threats to burn shops unless money was handed over.

He said the behaviour had succeeded in intensifying state and federal law enforcement scrutiny on the outlaw industry.

An arsonist sets fire to a Ballarat tobacco store. Picture: Victoria Police

“They’re doing everything they can to light themselves up,” Inspector Murray said.

While much was being done to solve and stop the firebombings, other work was continuing in the background.

That included looking into the assets of major players.

“We’re very patient,” Inspector Murray said.

“We’re prepared to play the long game. We’ll look into the background of every shop owner until these attacks stop. We want to know why they’re driving expensive cars and why they’re living in big houses. We’ll go over those who sit at the top of the food chain.”

A tobacco shop in Hadfield was firebombed. Picture: David Crosling

Most of the cigarettes and loose tobacco came from China and the Middle East, ­Inspector Murray said. It was bought for rock-bottom prices and sold here at massive mark-ups.

“Organised crime has filled the void, it’s a low-risk, high-profit industry,” he said.

Inspector Murray said those working behind the counter often had no idea who the owner was.

Those who were buying from such shops were unwittingly aiding criminals also involved in the drug trade and imperilling other retailers.

“They’re feeding the beast that is organised crime,” ­Inspector Murray said.

“People really need to think about whether they want to be part of the solution or part of the problem. I would not want to be a business owner next to a tobacco shop.”

Tobacco industry figures say the illicit trade has surged here while meeting sterner resistance from authorities elsewhere.

The Herald Sun was told the strongest of the crime syndicates in the sector was turned away from Tasmania more than a decade ago. And a businessman connected to one major Melbourne player was told he would not be setting up in South Australia because of that association.

But the market remains huge in Victoria and aggressive new investors have moved in, creating a powder keg.

Commander Penny Spies, of Australian Border Force, organised criminals trading in ­illegal tobacco had a big impact on the community.

“They use their profits to fund their lavish lifestyles and engage in criminal behaviour well beyond the sale of illicit ­tobacco,” she said.