Retailers praying new laws will end black market tobacco

In the past four years Debbie Smith has seen her tobacco sales drop by 90 per cent, which she said would be a good thing if her customers had quit. But they haven’t. Instead their money is going into the hands of criminal gangs. Details here.

Blue Mountain Heights Foodworks owner Debbie Smith hopes Queensland Government changes to tobacco licencing will see the end of unchecked sales of illegal chop chop, nicotine vapes and contraband cigarettes, Sunday, May 19, 2024. Picture: Kevin Farmer

News that Darling Downs health authorities seized more the $560,000 worth of black market tobacco in the past nine months is little comfort to Debbie Smith.

Like many people in small business, the Blue Mountain Heights Foodworks owner has watched as her customers abandoned her store in droves, flocking instead to the dozens of stores across Toowoomba selling illegal tobacco at cut rate prices.

She estimated her tobacco sales have dropped by 90 per cent in the past four years.

“It cost about $1.25 to land a pack of illegal cigarette in Australia, and these stores are selling them for $10 each,” Ms Smith said.

“They are not paying income tax, not paying GST, not paying the excise and now the criminal gangs have got into to.”

The raids conducted by Darling Downs Heath officials and Toowoomba Police targeted dozens of retail stores across the city over the past six months.

But rather than end their operations, the stores are still selling illegal tobacco openly.

The Chronicle spoke to one retailer, Corner Tobacco Mart on Hume Street just a few minutes after a raid in January this year.

He said he was unfazed by the raid and thanked police for their courteous manner.

The store remains open.

Ms Smith said the unchecked sales had hurt legitimate businesses and hoped the Queensland Government’s new licensing regime would bring an end to illegal tobacco.

“Tobacco is a legal product and what they are doing is evading tax and being non-compliant with package regulations,” she said.

Blue Mountain Heights Foodworks owner Debbie Smith hopes Queensland Government changes to tobacco licencing will see the end of unchecked sales of illegal chop chop, nicotine vapes and contraband cigarettes, Sunday, May 19, 2024. Picture: Kevin Farmer

“We as an industry, through the Master Grocers of Australia, fought to have the issue looked at by the Federal Home Affairs Department, because that is the department the controls Border Force and the Federal Police.

“We made repeated representations, then there was as Senate Inquiry. The former Home Affairs Minister Karen Andrews took 14 months to respond and said it was a state issue.”

The Queensland Government has stepped up.

From September 1 all retailers must have a tobacco license if they want to sell smokes or loose-leaf tobacco.

Retailers who are caught selling without a license, or in breach of it, face fines up to $46,000.

The new laws also give greater scope for Queensland authorities to act with oversight by the Australian Taxation Office, Border Force or the Federal Police.

Since the laws were passed in 2023 more that 15 million illicit cigarettes, six tonnes of loose tobacco and 148,000 vapes were seized in across the state, with a street value of $27 million.

While this might seem like a lot, it is a drop in the ocean compared to the volume of product that goes unchecked.

British American Tobacco – the leading tobacco wholesaler in Australia – estimated each of the black market store makes about $800,000 per year from illegal tobacco.

There are more than a dozen stores in Toowoomba, along with stores in our smaller region centres, like Pittsworth, Laidley, Gatton, Warwick, Dalby and Roma.

While Ms Smith is frustrated that the unchecked illegal sales have disadvantaged legitimate operators, her greater concern that they have completely undermined 40 years of public health policy aimed at driving down smoking rates.

“Raising the cost of smoking products was a good policy from a health point of view,” she said.

“The government wants people to stop smoking and I agree with that, but they have not stopped tobacco becoming a black market product.

“I am really concerned that we are going to have an increase in cancer in the coming years, because why would you stop if it is so cheap.

“I am not a voice for big tobacco, I am a voice for small sellers who genuinely want people to stop smoking.

“Anyone concerned with the health issues of tobacco should be equally outraged.”