Ritchies IGA boss blames booming illicit tobacco trade for job losses

The head of supermarket chain Ritchies IGA says organised crime is smashing the legal tobacco industry as illicit operators flog products at half the price.

The head of supermarket chain Ritchies IGA says organised crime is winning and its legal owners losing as the illicit tobacco industry booms.

Chief executive Fred Harrison told the Herald Sun rogue operators expanding unchecked in Victoria were putting great strain on the lawful sector.

The company says this is costing jobs.

The Herald Sun revealed on Tuesday that 1000 new illicit tobacco stores had set up in Victoria in the past year.

This has led to widespread firebombings as rival operators fight for market share, all while heavily hitting legal businesses like Ritchies IGA.

The latest salvo in the tobacco war gripping Melbourne’s underworld was fired on Thursday morning when a shop in Oakleigh went up in flames.

“It’s causing huge grief with the organised crimes involvement and from the retail perspective, straining financial viability for compliant stores in metro and regional Victoria,” Mr Harrison said.

The latest salvo in the tobacco war gripping Melbourne’s underworld was fired on Thursday morning when a shop in Oakleigh went up in flames after a car was driven into its front.

A submission from Ritchies IGA to the federal Department of Health stated illicit operators were selling tobacco products at half the price and with no tax impost.

This was costing jobs, the submission said.

The proliferation and proximity of the shops was making it impossible to compete, particularly in Victoria, Ritchies IGA said.

“Based on information reported by our staff and customers, we have confirmed that at least

38 of our 47 supermarkets across Victoria are operating near stores selling illicit tobacco – that’s 80 per cent of our store network,” the chain’s submission said.

Illegal tobacco operators are heavily hitting legal businesses like Ritchies IGA. Picture: David Hurley/Border Force

“When a store opens in our area and begins selling illicit tobacco, our store managers often

become aware of its existence within a matter of weeks, either through a sudden drop in our

legal tobacco sales, or through word of mouth from customers asking, `Why don’t you sell

cheap cigarettes too’?”

The company said these issues were compounded by nicotine-vape bans which have played into the hands of black market operators.

Ritchies IGA said a licensing regime which dictated only “fit and proper persons” were allowed to sell tobacco and vape products was needed.

It argued this would make it easier for enforcement agencies to identify illegal businesses and target their activities.

Ritchies IGA has outlets in Victoria, New South Wales and Queensland.

Originally published as Ritchies IGA boss blames booming illicit tobacco trade for job losses