Penalties overdue

March 07, 2018

The two packets of illegal cigarettes sold at Cobram Gift and Cigarette Accessories.

The Australasian Association of Convenience Stores (AACS) has commended Liberal MP Craig Kelly for formally recognising the huge impact the illicit tobacco trade is having on communities and small businesses.

The Federal Government has moved to introduce penalties of up to 10 years in prison for manufacturing illicit tobacco, with legislation passing the lower house. It will now be reviewed by the Senate.

The legislation also proposes to create penalties of up to five years in prison for possessing, buying or selling illicit tobacco.

AACS chief executive officer Jeff Rogut said it was high time illicit tobacco was seriously addressed.

‘‘For too long, illegal cigarettes with branded logos, tax-free and with no quality control standards, have been sold with impunity in the community,’’ Mr Rogut said.

‘‘It is worryingly easy for people to access these illegal products and the lack of a proper response has seen the market spiral out of control.

‘‘The AACS has been vocal about the need for authorities to crack down on these criminals and the legislation being progressed by the government calls for tougher penalties, which are absolutely needed.’’

Mr Rogut said it was encouraging the legislation had bi-partisan support.

‘‘Convenience store owners and staff know first-hand the impact that excise increases and regulations like plain packaging have had on the market for illegal cigarettes,’’ he said.

‘‘The regulatory environment for legal tobacco in Australia has made us one of the world’s most lucrative markets for organised criminals involved in the illicit tobacco trade.’’

According to KPMG estimates, illicit tobacco accounts for nearly 14 per cent of the total tobacco market in Australia, and illicit products are being sold with impunity across Australia to anyone, potentially even minors, costing the government more than $1.6billion in lost tax revenue each year.

Mr Rogut said consumers might think they were saving money by purchasing illicit tobacco products, but in reality they could be doing themselves considerable harm.

‘‘With no genuine country of origin, no quality control standards and no idea what these products contain, consumers may be putting themselves at more risk than they realise,’’ he said.

The AACS has consistently reinforced the major impact the trade of illicit tobacco has on responsible retailers of legal tobacco products.

Adding to retailers’ burdens are the higher insurance costs and additional security requirements they must have in place.

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