By the time you finish reading this, one million illegal cigarettes will have been smuggled into Australia.
Vigilant Border Force officers may have intercepted the shipment and stopped it being delivered into the hands of criminals, but the overwhelming evidence suggests the cargo slipped through.
Border Force has finite resources, and right now they are being overwhelmed by illegal tobacco imports at our ports.
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The size and scale of the crime crisis around the tobacco war is simply staggering. Record amounts of rolled cigarettes and loose-leaf tobacco is arriving every single day.
Tim Fitzgerald, Deputy Commissioner Australian border force becomes emotional when talking about the enormity of the crisis Credit: 7NEWS
Currently, Sydney’s Port Botany is the main target, a very deliberate strategy of criminal syndicates to overwhelm one port in any one period. Last year, Melbourne was the focus. It will shift again while the tobacco kingpins look for weak links in our borders.
This is what it’s all about – illegal tobacco arriving at our ports Credit: 7NEWS
The staggering statistics
In just the first five months of this year, 982 million illicit cigarettes have been seized entering Australia. Border Force also intercepted 395 tonnes of illicit tobacco, and 5.5 million vapes. Just read those numbers again and let it sink in.
The second half of last year was also out of control: 2.13 billion cigarettes seized along with 568 tonnes of loose-leaf tobacco and an incredible 11 million vapes.
Putting that all in dollars terms, the second half of last year and the first five months of this year, that’s approximately $7 billion dollars in lost tax excise — or in customs terms, duty — evaded due to illegal import.
Not only is the government losing those billions, but the criminal enterprises behind illicit tobacco are making billions. Best guess is about $6 billion a year in the sale of illegal cheap smokes and vapes.
Billions of dollars of black-market sales a year, fuelling an explosion in all sorts of ruthless crime across Australia.
Firebombing at a convenience store Credit: Supplied
We see those crimes every night in the 6 o’clock news. The almost daily firebombings, kidnappings, bashings and extortion – the insidious tobacco wars in our suburbs. But our best law enforcement experts are also confident that black market tobacco is feeding profit into growing other crimes like heroin distribution and even child exploitation.
Brendan Thomas, the CEO of AUSTRAC, the government’s financial crime fighting agency, says the criminals pushing illicit tobacco around Australia should be treated the same as the worst of drug dealers.
“People selling heroin and cocaine don’t have a shop front on every corner, but these people do,” he said. “The people that are moving money and moving illicit tobacco are the same people moving illicit drugs. It’s hardened organised crime.”
Its estimated there are 14,000 tobacconists and convenience stores around the country allegedly dealing in illicit tobacco.
I spent time with the NSW Police Force on a raid on one of these shops in western Sydney: a convenience and tobacco store that has been under surveillance for many months by the Financial Crimes Squad’s Arson Unit.
We watched as they arrested a young man who pleaded his innocence and was then hit with a string of charges relating to offences of large-scale tobacco possession and dealing with the proceeds of crime.
A young man arrested at a convenience store during a police raid Credit: 7NEWS
Just one shop, in one suburb in one part of Australia. Are police cutting the head off the snake in this one operation? Probably not. They’ll allege it’s a localised example of the nationwide crime crisis. But it’s a start.
‘Government-created’ crisis
The bigger fix would seem to be a very bold, and very controversial backflip by the government because there’s a chorus of experts in economics and crime that say this ruthless black market in illicit tobacco is an entirely government-caused problem.
Hiking up the tobacco excise since 2019 has created a product so excessively expensive — to try and force smokers into quitting — that it simply opened the door to crime networks to flood the market with cheap smokes. $15 for a packet of illegally imported cigarettes at your corner tobacconist or $55 a packet for the legitimate smokes?
You know what smokers are going to choose. It’s not their fault the aggressive government excise policy created a problem, they’re not mugs and they’re not going to pay full freight for their smokes. As many told me, it’s not a case of doing right or wrong, it’s just cheaper and it’s not their problem to fix.
Since 2015 there have been multiple submissions to government that the excise increases had tipped over from good policy to bad policy, and rather than using price to force smokers to quit it had plateaued and forced remaining addicted smokers into cheaper illegal cigarettes which exploded onto the market and became readily available on most streets.
Combined with an almost prohibitionist-style vapes policy introduced in 2024, based on pharmacy approval and supply, smokers and vapers didn’t flinch in turning to illicit products.
Leading economist Chris Richardson, who has made government submissions on tobacco excise puts it this way: “We are failing on health. We are failing in terms of tax policy, and we are failing in terms of fighting organised crime. That’s not a fail, it’s an epic fail.”
Economist Chris Richardson Credit: 7NEWS
Adding more pressure on the government to act on tobacco excise urgently to disrupt the black-market trade, Scott Weber from the Police Federation of Australia says his 60,000 members just can’t police the problem to a level that would start to smash the illicit tobacco trade.
“Police are stretched to the absolute limit, and we just actually can’t arrest our way out of this,” he said.
As I wrote at the start, just in the time it takes to read this article, container loads of illicit tobacco have hit our ports.
The criminals organising the imports hoping that the vast majority of their product slips through undetected, and even if they lose a few million cigarettes on any day, millions more are headed for illegal distribution across Australia.
While smokers crave cheap cigarettes, and the government won’t budge on what it believes is gold standard health policy, law enforcement agencies around Australia are outnumbered in this tobacco war, taking pot shots at an enemy that seems unstoppable.
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