Illicit Tobacco - Queensland

NATIONAL QUEENSLAND

George Kovits and Jos de Bruin from MGA, together with other industry organisations, met with Qld Minister for Police the Hon. Mark Ryan MP on the 10th August 2021.

The purpose of this meeting was to discuss the scale of illicit tobacco across Queensland and the significant impact on the viability of Qld Small Businesses who stock and sell legitimate tobacco products in a strictly regulated environment.

MGA sought immediate assistance from Minister Ryan despite this issue being of federal jurisdiction. Discussions included what could be done to eradicate this illegal sale of tobacco and what are the actions to this end. It now accounts for greater than 20% of the Australian market.

The past 24 months have witnessed an explosion in illicit tobacco sales.

The presence of illicit tobacco retailers in nearby proximity to legitimate tobacco retailers means tens of thousands of dollars a week in lost sales for retailers.

Shopfronts who are dealing in illicit tobacco can offer cigarettes and loose tobacco at less than half the price of their legal alternatives.

This is having a major impact on Queensland small businesses, who are now just finding their feet again in a post COVID environment. Small retailers lose cigarette sales and the sale of other items adult smokers usually buy when in their shops.

The group offered to work closely and collaboratively with Qld Government and Police to help eliminate smuggled, counterfeit, and illicit tobacco products. A low-cost tobacco licence could be introduced as a possible solution. This could become a control and reporting mechanism as well as provide a response to rogue traders across the state—heavy fines for tobacco sellers who don’t have a tobacco licence.

The absence of a dedicated licensing framework results in an increased illicit tobacco presence across the state, led by emboldened criminals who are willing to take the risks that regulatory gaps expose.

At a minimum cost to the legitimate retailer, such a scheme would ensure due process is undertaken on compliance to regulation and central database storage of compliant and non-complying outlets is maintained whilst acting as an effective deterrent for criminals.

The trade-off for compliant retailers of additional red tape and minimal cost would be stronger enforcement of illegal trade activity.

MGA will continue to liaise with the Qld Government to address this serious issue

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42 INDUSTRY NEWS Illegal tobacco NATIONAL SOUTH AUSTRALIA Criminals profit. Your community pay.

What is illegal tobacco?

• Tobacco grown, manufactured or produced in Australia without a licence. • Imported tobacco for which no duty has been paid. • Tobacco sold without payment of taxes.

Life cycle of illegal tobacco $822 million

went to criminals instead of the community*

Growing tobacco in Australia for commercial sale or personal use is illegal.

*2018–19

Would you recognise a tobacco plant?

• 2.5 metres tall • Large green leaves • Long trumpet-shaped, white-pinkish flowers • May resemble kale, cabbage or corn.

Signs of an illegal growing operation

• Intense labour production between November and May • People approaching real estate agents, landowners or farmers to lease land • Unusual earthworks along creeks and rivers • Unexplained and potentially unlawful use of water resources • An unexplained strong tobacco odour • Unusual source of loose tobacco The ATO is part of the Illicit Tobacco Taskforce, which was established to detect, disrupt and dismantle serious organised crime syndicates that deal in illicit tobacco. Up to 30 June 2021 our results are:

> 496,000 kilograms

Seized and destroyed

> $571 million

Estimated excise value

Let’s cut illegal tobacco off at the root

• Report growing operations • Stop buying illegal tobacco products • Report illegal tobacco products being sold • Report suspicious activity.