Tobacco sales collapse amid black market vapes boom

Amid a record decline in tobacco sales at convenience stores, there are concerns about the high volume of illicit tobacco and vapes flooding the black market.

The Australian Association of Convenience Stores recorded its biggest decline in tobacco sales on record, prompting concerns about the high volume of illicit tobacco and vapes flooding the black market and undercutting the government’s future tax revenue.

The AACS, which counts three major tobacco companies among its membership base, has recorded a 19.8 per cent decline in tobacco sales in the most recent quarter and a 13.7 per cent decline in the first quarter of this year, new figures from the association’s half-year report reveal.

Tobacco sales through excise taxes and GST contribute an estimated $15bn a year to the nation’s economy. However, the Intergenerational Report stated that tobacco consumption was expected to flatline in the decades ahead ­despite the government ramping up tobacco controls.

AACS chief executive Theo Foukkare said the government had failed to crack down on a ­rampant trade of black market vapes and tobacco products, causing trade for legitimate retailers to suffer.

“The state of illegal tobacco and the vape black market in Australia is now unfortunately a national embarrassment,” Mr Foukkare said.

“We have over 90 million illegal vapes that flooded into Australia last year and we believe that number will be higher this year.

“And separate to that, one in four tobacco products are now being sold illegally by criminals. The government’s failure to actually regulate this properly with the correct enforcement for retailers has become a national crisis.”

Mr Foukkare has called on the government to crack down on the black market to prevent money from the lucrative illicit vape market from flowing into the hands of criminal organisations.

Polling from RedBridge has found that 81 per cent of Australians support nicotine vaping products being regulated in the same way as alcohol and tobacco.

“The profits from these products are actually being used to fund other illegal activities and cause disruptions in local communities, as well as supply a whole raft of other illicit products,” Mr Foukkare said.

“And it’s the same for vaping, so unfortunately you’ve got the same network of stores that are selling illicit tobacco also selling ­illegal vaping products.

“We feel quite strongly about the fact that the Albanese government can fix this crisis by strictly regulating vaping products in the same way as alcohol or tobacco and also implementing a national enforcement crackdown on the nicotine black market.”

Health Minister Mark Butler has announced a ramping up of the nation’s tobacco controls and measures to stop the importing of non-prescription vapes. He wants to work with states and territories to close down the sale of vapes in shops such as convenience stores.

“Australia needs to reclaim its position as a world leader on tobacco control,” Mr Butler said.

“As we stamp out the growing black market in illegal vaping, we also need to prevent people from trading their vapes for cigarettes.

“The May budget included measures to bring smoking rates down, protect people from taking it up, and additional support for current and former smokers to look after their health.”

Opposition health spokeswoman Anne Ruston said Labor’s tobacco measures would not be effective without tackling gaps in enforcement.

“There appears to be no plan from this Labor government on how they intend to enforce measures at the border to stop the ­importation of illegal vapes,” she said. “Without addressing enforcement, the government’s headline measure is not worth the paper it’s written on.”