Retailers warn new tobacco laws ‘punish’ legal sales amid black market boom

Legal tobacco retailers are warning millions of dollars worth of cigarettes could be destroyed ahead of new tobacco laws being imposed.

Federal Health Minister Mark Butler. Picture: NewsWire / Martin Ollman

Legal tobacco retailers swamped by the black market and organised crime gangs say they’ve been dealt another blow due to upcoming new laws, leaving businesses to rush their cigarettes out the door or risk destroying millions of dollars’ worth of stock.

The Daily Telegraph can reveal businesses are racing to sell off stock piles of legal cigarettes, offering discounts of up to 20 per cent, before they can no longer be sold when new tobacco laws come into effect across the country on July 1.

Sweeping changes will from next month require health warnings on individual cigarettes, require standardised pack sizes, and ban the sale of flavours like menthol.

Retailers were meant to have a three-month “transition period” to sell off the old stock before it becomes non-compliant next month.

But they claim the new products, which were supposed to be available for purchase from April 1, only started to trickle to retailers in late May.

The delay means retailers have had to keep ordering and selling old products and now have less than a month until they are stuck with piles of worthless stock, all while the government fails to stem the deluge of illegal cigarettes pouring into the country.

One Sydney retailer has resorted to discounts on the front door to get rid of stock before the new laws come into effect. Picture: Elizabeth Pike

Australian Association of Convenience Stores chief executive officer Theo Foukkare said the delay had punished legal retailers which were trying to do the right thing.

He said the association had “pleaded on numerous occasions” with the government since October warning them about the short transition period, but the concerns “fell on deaf ears”.

“Smaller, legal retailers are extremely frustrated because they have abided by all the laws … and now they could be throwing away cash into the hundreds of thousands of dollars … If you add up (the losses) around the country it could run into the tens of millions,” Mr Foukkare said.

Cigarettes with individual health warnings will be required for sale from July 1. Picture: Department of Health, Disability and Ageing

“This is all while illegal operators continue to sell branded, unregulated and untaxed products and continue to get away with it, supporting organised crime groups.”

A Sydney retailer, who wished to remain anonymous, runs multiple stores and said the government was worrying about the wrong compliance issues while it had the tobacco war on its hands.

“(Federal Health Minister) Mark Butler is the most delusional person I’ve ever come across, the government is living in la la land when it comes to tobacco legislation,” he said.

Larger health warnings and health inserts will also be required. Picture: Department of Health, Disability and Ageing

“They aren’t collecting the excise they should on illegal tobacco, yet they are willing to forgo their GST dollars and make us throw out all of this legal stock.”

A fellow Sydney retailer feeling the pressure has resorted to offering discounts, with a poster plastered on the front door of their store, reading: “Due to government changes to cigarette packaging regulations we need to remove some stocks.”

“All clearance items are 20 per cent off from scan price,” the poster read.

Advertising discounts and deals on cigarettes must follow strict requirements.

But the tactics come after late changes to health warnings in December triggered delays to manufacturers and retailers, with many small to medium businesses unable to return their stock to wholesalers and other sellers who are also looking to shift product.

Despite these concerns, the Department of Health, Disability and Ageing would not budge on its hard deadline.

“From 1 July 2025, all tobacco products sold in Australia must, by law, comply with the new requirements,” a spokeswoman said.

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Originally published as Retailers warn new tobacco laws ‘punish’ legal sales amid black market boom