10 million a week: Illegal tobacco seizures by Australian Border Force surge

Millions of illegal cigarettes are being seized every day but they are only a fraction of what is being imported into Australia. See the latest busts and how much criminals are pocketing from it.

Australian Border Force check contains at Melbourne's docks. There are hundreds of millions of illegal cigarettes coming into Australia each year despite increasing checks. Picture: David Caird

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Ten million illegal cigarettes are being seized every week as the Australian Border Force puts their “foot on the throat” of organised crime.

Brazen crime groups are not even bothering to conceal illegal cigarettes anymore, they are simply bringing in containers stacked high with cartons.

But the seizures are only a fraction of what is being imported into Australia, with illegal cigarettes being sold at less than half the price of legal smokes.

The illicit tobacco industry is pouring at least $1 billion a year into criminals’ pockets, with the cigarette industry claiming that soaring taxes pushed people into the black market.

Federal Health Minister made no apologies for taxing cigarettes, saying it was “one of the most effective and efficient ways that governments can reduce tobacco consumption.”

An Australian Border Force Customs officer with a concealed shipment of cigarettes boxed as LED lights from China found in a container. Picture: David Caird

Australian Border Force Assistant Commissioner James Watson said illegal cigarettes had become a major focus for his agency.

“We’ve got our foot on the throat when it comes to detecting and preventing organised crime being able to use the smuggling of illicit tobacco to do what they do,” Mr Watson said.

Mr Watson pleaded with smokers to think twice about buying illegal cigarettes because it was funding “misery”.

“I don’t want to see good law abiding people actually unwittingly contributing to the coffers of serious and organised crooks through getting what they think are cheap packets of smokes,” he said.

“Serious and organised crime is using the significant revenue that’s being made out of tobacco smuggling to fund other activities, whether that’s bringing in border controlled drugs or committing other offences to protect their industry.”

A turf war over the trade between Middle Eastern crime groups in Melbourne has led to firebombings, murders and a grave robbery.

Ten million illegal cigarettes are being seized every week by the Australian Border Force. Picture: David Caird

An Iraqi exile Kazem Hamad unmasked this week as a suspected key player in the battle for control of the industry, which police have warned was likely to spread interstate.

When asked if the Hells Angels or Comanchero bikie gangs were involved in the trade, Mr Watson said: “Wherever you see wealth and the opportunity for illicit wealth, you will see all forms of serious and organised crime, including outlaw motorcycle gangs.”

Australian streets are now littered with packs of Manchester, Double Happiness and Euro cigarettes that sell for around $18in “vape” shops across Australia.

That’s compared with about $50 for a packet of 20 legal cigarettes.

The Federal Government pockets $1.24 in excise tax on each legal cigarette sold in Australia, which increases by five per cent each year.

The ABF seized 1.7 billion cigarettes in the 2023 financial year, as well as 867 tonnes of “chop chop” – loose leaf tobacco.

That’s equal to $3.46 billion of lost tax revenue.

Legal cigarette retailers who make as little as $1 profit per pack say they are being put out of business by the illegal smokes.

They blame the government’s tax grab for creating an underworld market.

ABF Assistant Commissioner James Watson. Picture: Jason Edwards

Kazem Hamad (left) at the footy with Toby Mitchell. Picture: Instagram

A legal cigarette retailer who spoke to this masthead on condition of anonymity said they did not know how long they could survive because of the illegal cigarette trade.

“The government increased the price of cigarettes and it’s getting worse,” he said.

“The number of smokers is still the same, not more, they only push them to the black market and that’s why we have more criminals.

“The government thinks they will get more tax but that drops, they lose.”

Butler said 50 people die every day from smoking in Australia.

“The main driver that reduces illicit tobacco is the same one that reduces legal tobacco — that is, declining consumption,” he said.

He was appointing an illegal tobacco and vape commissioner to target the “scourge” of counterfeit cigarettes.

“Many smokers and recent ex-smokers report that high prices of tobacco products are a key factor motivating their attempts to quit or cut down smoking,” he said.

A firebombed vape shop in West St Hadfield, Melbourne, has reopened. Picture: Supplied

“Research in Australia and overseas has found that lower income groups such as young people and lower socio-economic populations tend to be responsive to price increases.”

Law enforcement sources said the illegal tobacco industry was not only making criminals cash directly, but opening doors for the movement of illicit drugs.

Criminal groups have been using the illegal cigarettes to test smuggling routes and groom trusted insiders in the shipping and freight forwarding industry to avoid detection.

If they get through regular shipments of cigarettes, they can then move on to cocaine and ice, which are considerably more profitable.

There have been 29 fire bombings across Melbourne since March as two crime groups fight it out for control of the illegal cigarette market.

Mohammed Keshtiar (AKA Afghan Ali) who was shot dead near Chapel St on his way home from the gym. Picture: TikTok

The shooting murder Mohammed Akbar Keshtiar, known as “Afghan Ali”, in August in South Yarra and the killing of Robert Issa, 27, at a shopping centre in Melbourne’s outer northern suburbs in October, were both linked to the trade.

News Corp Australia has visited some of the firebombed shops caught in the crossfire this week.

Damage was still clearly visible at one shop in which was rammed by a BMW then set alight by a criminal who also caught fire in the attack.

Two shops that had been firebombed had reopened.

A staff member at one store said: “It doesn’t concern you, but thank you for checking up, enjoy the rest of your day.”

Staff at another store said it was “all good now” but refused to comment further.

Victoria Police have warned that the turf war in Melbourne was at risk of spreading to other states.

Detective Inspector Graham Banks said last month: “We believe two major syndicates are trying to get control in Victoria and in other states.”

LATEST BUSTS

Two Adelaide brothers were fined $250,000 each after they were found guilty of importing nearly a tonne of illicit tobacco into Australia in November. More than 960kg of products were intended to be sold in small grocery stores throughout South Australia before they were seized, alongside $500,000 in cash.

The $500,000 in cash seized in South Australia. Picture: ABF

More than 960kg of products were intended to be sold in small grocery stores throughout. Picture: ABF

In August the national Illicit Tobacco Taskforce busted one of the alleged biggest tobacco criminal networks, spread across a large number of Queensland and NSW tobacco retail outlets.

Eleven search warrants turned up more than 2.8 million cigarettes, $1.4m in cash, 380kg of loose leaf tobacco, and a collection of knuckle dusters.

Some of the $1.4m in cash seized after 11 properties across the South East Queensland, Tweed Heads, and Coffs Harbour were raided. Picture:: ABF

The 9,762kg of tobacco (worth $16.2 million) seized. Picture: ABF

Between Good Friday and Easter Sunday the Australian Border Force seized a record-breaking haul of 28 million cigarettes and 9000kg of tobacco worth $48.8m.

The massive haul was discovered across multiple shipments declared as everyday items imported to NSW from China, Singapore and Korea.

Police raided an alleged illegal tobacco plantation in the NSW central west. Picture: ABF

ATO officers were joined by the ABF. Picture: ABF

After a tip-off in 2022, police raided an alleged illegal tobacco plantation in the NSW central west in April as part of a joint investigation with the taxation office.

The ABF seized more than $28m worth of products, which police allege were part of a growing trend among criminal syndicates to “grow their own” as border raids and seizures increase.

A man who orchestrated a huge importation of illegal tobacco from the Middle East to Melbourne was jailed for two years in 2022, after the ABF detected three million “Manchester” cigarettes and 600kg of “Al-Faker” molasses tobacco worth $4m hidden in shipping containers.

Originally published as 10 million a week: Illegal tobacco seizures by Australian Border Force surge