$10 or $58? How Australia is losing the war on illegal tobacco

Butt of a bad joke: Two 20-packs of Marlboro cigarettes, one costs $58 while the other is sold for just $10 - this staggering 480 per cent price gap exposes the flaws in our tobacco excise system.

Illegal cigarettes being sold in Sydney in broad daylight

Here are the images that show how badly Australia is being annihilated in the war on ­illegal tobacco.

These two 20-packs of Marlboro cigarettes are among hundreds of varieties freely sold across shop counters across Sydney but, while one costs $58, the other is sold for just $10.

The $58 pack of legal smokes were locked behind black casing in Woolworths and sold with a government-regulated warning label, which showed an image of a young boy struggling to breathe with the words “second-hand smoke reduces your child’s lung capacity”.

But at a recently-opened convenience store in Sydney’s north, an illegal pack plastered with a dupe of the famous Marlboro logo was being flogged for just $10 on a shelf alongside 20 different ­varieties.

The 480 per cent price difference between the packs on sale comes as Treasurer Jim Chalmers refuses to address the nation’s struggling tobacco excise, which is currently taxed at $1.40 per cigarette stick and is set to be increased by another 5 per cent in ­September.

“I’m not convinced that cutting the excise on cigarettes would mean that would be the end of illegal activity. I don’t think the answer here is to make cigarettes cheaper for people. We need to get better at compliance,” Dr Chalmers said.

It comes as at 2am Friday, emergency services were called to Meadows Rd, Mount Pritchard after a driver crashed into a corner store next door to a tobacconist, before lighting the vehicle on fire and fleeing the scene. According to Channel 7, the business has been targeted three times in six weeks.

NSW Premier Chris Minns has blamed the tax for a major rise in criminal behaviour and warned he may be reluctantly forced to reassign police who are currently working on other serious investigations.

Earnings from the tobacco excise have plummeted from a record $16 billion in 2019-2020 to a little over $7 billion expected this financial year, according to the most recent federal budget papers. In that time the number of businesses registered to sell tobacco in NSW alone has increased from 15,000 to almost 20,000.

How cigarettes are legally displayed in Woolworths (left) and how they are displayed illegally at a tobacconist in Sydney (right). Picture: Supplied

An example of the illegal Marlboro cigarettes available in Sydney for just $10 (left) and the legal smokes in Woolworths for $58 (right).

New data has revealed that Australia easily has the most expensive cigarettes in the Asia-Pacific region, with an average pack of smokes $13 cheaper in New Zealand, $26 less in Hong Kong and a whopping $51 less in Japan. The research from FTI Consulting, funded by the tobacco industry, has found the illicit market in Australia now represents 39 per cent of overall sales.

Nationals Senator Matt Canavan claimed the tax was “not working and clearly doing damage to society.”

“It is helping fund the criminal gangs that are behind the explosion in crime rates across Australia. It is a failed policy – it’s not even raising money as it was intended to do,” Mr Canavan said.

According to the Australian Institute of Health and Welfare, the number of daily smokers in Australia has declined from 11 per cent in 2019 to 8.3 per cent in 2023, however this has been offset by at least 700,000 people using vapes and e-Cigarettes.

Originally published as $10 or $58? How Australia is losing the war on illegal tobacco