October 23, 2019: The Australasian Association of Convenience Stores (AACS) has welcomed the Health Minister’s commitment to a national tobacco public education campaign but has slammed the Government’s continued refusal to properly address the scourge of illegal tobacco at street level around Australia.
The AACS has consistently identified public education as Government’s best weapon in reducing the incidence of smoking, as opposed to straw man measures like excise increases and plain packaging – measures which have had the sole effect of driving consumers to the black market.
“Despite the proclamations of the well-funded health lobby, the current response to tobacco reduction, which has been lazily focused on taxation, has not worked. Tobacco consumption has not deviated from long term trends, but the sources from which consumers are buying tobacco have shifted significantly,” Mr Rogut says.
“Australia is internationally recognised as one of the world’s most lucrative markets for illegal tobacco smugglers. Consistent seizures at the border, as recently as today, prove the point.”
Today, Australian Border Force announced the seizure of 1,094,000 illegal cigarettes in an air cargo shipment from Korea, weighing over a tonne and representing more than $1.1 million in evaded tax.
“Border Force does a great job targeting criminals attempting to smuggle illegal cigarettes into the country. But the sad reality is that for every shipment seized, many others slip through undetected. And once these products reach their contacts in Australia, they are being distributed throughout communities freely,” Mr Rogut says.
“It’s at the street level that the effort to crack down on illicit tobacco completely fizzles out.
“Illicit tobacco products harm two stakeholders above all others: people who consume them, including minors, because of the unknown ingredients and no quality control standards, and honest small retailers of legal tobacco who lose significant legitimate sales to criminals,” he says.
Australia has experienced a huge spike in the illicit tobacco trade, fuelled by the regulatory environment of regular and excessive excise increases on legal tobacco, and spiralling since the introduction of plain packaging.
According to KPMG LLP, the proportion of illicit tobacco as a proportion of the total tobacco market in Australia is over 14%, costing the economy more than $2 billion a year.
Yet at street level, where retailers of legal tobacco and consumers not just suspect – but know – that illegal cigarettes are easily accessible and cheap, nothing is being done.
“It’s inexplicable. More than 14% of the tobacco consumed in Australia is illegal. Imported by criminal syndicates, distributed country wide, sold with impunity by unscrupulous retailers unafraid of the consequences, because there effectively are none,” Mr Rogut says.
“We urge the Health Minister, in the design and implementation of this new education campaign, to integrate actual measures to crack down on illicit tobacco in the community and punish criminals found to be distributing and selling these illegal products to the full extent of the law,” Mr Rogut says.
The AACS acknowledges that legal tobacco, responsibly sold with existing age restrictions in place, is an important product for convenience stores representing, on a national average basis, 39.5% of a typical store’s sales.
“We believe adults should have the right to choose to consume legal products, based on informed decisions, and that a focus on education is the most effective way to reduce the incidence of smoking while not supporting black market criminals at the expense of honest retailers,” Mr Rogut says.
Chief Executive Officer
Australasian Association of Convenience Stores
Ph: +61 467 873 789