Black market smokes are burning a hole in small business

The Advertiser

a day ago

Three separate tobacconists. Three packs of black market cigarettes.
$15 each. Cash only. No questions asked.
An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred.
With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached.
They say to take it up with health authorities.
Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff.
They promise to raise the issue with the federal minister.
But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco.
He isn't the only one with that opinion.
Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM.
However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates.
ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers.
Comments are open at the bottom of the article, or email [e-mail].
Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn.
In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40.
Mr Allen said a further increase in the excise was coming in September to take that figure even higher.
However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market.
And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies.
"It's just madness," Mr Allen said.
"None of this makes any sense.
"As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies."
The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others.
Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year.
Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine).
However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well.
Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business.
"We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said.
"They've gone to about 30 or 40 per cent [sales] on what they were.
"And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get.
"We worked out it's costing us in profit about $2000 a week."
There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities.
"Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said.
"If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having.
"So then the only places people will be able to get tobacco are the illegal places.
"And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model.
"They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs."
Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015.
He now runs a consulting firm with advice on illicit international trade as one of its key activities.
"I was among the first to discover how big the problem really was," Mr Pike told ACM.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market."
That market share has a significant impact on federal government excise revenue, he said.
While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options.
"Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said.
"It's $7.4billion now and could go significantly lower than that.
"It's just fallen off a cliff - the government's approach is failing at every level."
Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions.
"We're not going to be able to arrest our way out of this," Mr Pike said.
"The government is looking for policy 'wins' without any care for the consequences.
"You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?"
The focus on supply was also a bone of contention for Mr Allen.
"This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said.
"We want to get smoking rates down, absolutely. But you've got to do it in a sensible way.
"Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue
"We can't control the supply. You've just seen that.
"It's like trying to put the genie back in the bottle."
Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers.
She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60.
"I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now.
"This is the only way I can continue.
"I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said.
"It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising.
"And it's forcing people like me, who are law-abiding people, to go and break the law."
Margaret said the government's "greed" was hurting the people least able to afford it.
"It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation.
"I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous."
She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs.
"I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said.
"I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy.
"So I guess they should just stop selling them."
ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects.
A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking".
The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking.
However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason.
While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy".
"I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM.
"We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone."
Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions".
"The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said.
"We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response.
"And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco."
As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model.
Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes.
NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers.
"We understand the community's frustration at the growth of the illicit tobacco market," he said.
"These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW.
"We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk.
"This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said.
Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise.
He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market.
Mr Park said he wanted to take action regardless.
"I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said.
If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055.
Three separate tobacconists. Three packs of black market cigarettes.
$15 each. Cash only. No questions asked.
An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred.
With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached.
They say to take it up with health authorities.
Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff.
They promise to raise the issue with the federal minister.
But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco.
He isn't the only one with that opinion.
Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM.
However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates.
ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers.
Comments are open at the bottom of the article, or email [e-mail].
Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn.
In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40.
Mr Allen said a further increase in the excise was coming in September to take that figure even higher.
However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market.
And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies.
"It's just madness," Mr Allen said.
"None of this makes any sense.
"As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies."
The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others.
Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year.
Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine).
However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well.
Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business.
"We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said.
"They've gone to about 30 or 40 per cent [sales] on what they were.
"And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get.
"We worked out it's costing us in profit about $2000 a week."
There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities.
"Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said.
"If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having.
"So then the only places people will be able to get tobacco are the illegal places.
"And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model.
"They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs."
Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015.
He now runs a consulting firm with advice on illicit international trade as one of its key activities.
"I was among the first to discover how big the problem really was," Mr Pike told ACM.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market."
That market share has a significant impact on federal government excise revenue, he said.
While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options.
"Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said.
"It's $7.4billion now and could go significantly lower than that.
"It's just fallen off a cliff - the government's approach is failing at every level."
Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions.
"We're not going to be able to arrest our way out of this," Mr Pike said.
"The government is looking for policy 'wins' without any care for the consequences.
"You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?"
The focus on supply was also a bone of contention for Mr Allen.
"This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said.
"We want to get smoking rates down, absolutely. But you've got to do it in a sensible way.
"Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue
"We can't control the supply. You've just seen that.
"It's like trying to put the genie back in the bottle."
Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers.
She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60.
"I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now.
"This is the only way I can continue.
"I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said.
"It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising.
"And it's forcing people like me, who are law-abiding people, to go and break the law."
Margaret said the government's "greed" was hurting the people least able to afford it.
"It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation.
"I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous."
She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs.
"I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said.
"I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy.
"So I guess they should just stop selling them."
ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects.
A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking".
The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking.
However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason.
While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy".
"I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM.
"We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone."
Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions".
"The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said.
"We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response.
"And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco."
As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model.
Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes.
NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers.
"We understand the community's frustration at the growth of the illicit tobacco market," he said.
"These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW.
"We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk.
"This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said.
Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise.
He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market.
Mr Park said he wanted to take action regardless.
"I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said.
If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055.
Three separate tobacconists. Three packs of black market cigarettes.
$15 each. Cash only. No questions asked.
An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred.
With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached.
They say to take it up with health authorities.
Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff.
They promise to raise the issue with the federal minister.
But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco.
He isn't the only one with that opinion.
Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM.
However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates.
ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers.
Comments are open at the bottom of the article, or email [e-mail].
Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn.
In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40.
Mr Allen said a further increase in the excise was coming in September to take that figure even higher.
However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market.
And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies.
"It's just madness," Mr Allen said.
"None of this makes any sense.
"As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies."
The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others.
Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year.
Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine).
However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well.
Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business.
"We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said.
"They've gone to about 30 or 40 per cent [sales] on what they were.
"And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get.
"We worked out it's costing us in profit about $2000 a week."
There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities.
"Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said.
"If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having.
"So then the only places people will be able to get tobacco are the illegal places.
"And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model.
"They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs."
Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015.
He now runs a consulting firm with advice on illicit international trade as one of its key activities.
"I was among the first to discover how big the problem really was," Mr Pike told ACM.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market."
That market share has a significant impact on federal government excise revenue, he said.
While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options.
"Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said.
"It's $7.4billion now and could go significantly lower than that.
"It's just fallen off a cliff - the government's approach is failing at every level."
Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions.
"We're not going to be able to arrest our way out of this," Mr Pike said.
"The government is looking for policy 'wins' without any care for the consequences.
"You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?"
The focus on supply was also a bone of contention for Mr Allen.
"This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said.
"We want to get smoking rates down, absolutely. But you've got to do it in a sensible way.
"Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue
"We can't control the supply. You've just seen that.
"It's like trying to put the genie back in the bottle."
Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers.
She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60.
"I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now.
"This is the only way I can continue.
"I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said.
"It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising.
"And it's forcing people like me, who are law-abiding people, to go and break the law."
Margaret said the government's "greed" was hurting the people least able to afford it.
"It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation.
"I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous."
She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs.
"I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said.
"I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy.
"So I guess they should just stop selling them."
ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects.
A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking".
The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking.
However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason.
While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy".
"I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM.
"We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone."
Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions".
"The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said.
"We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response.
"And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco."
As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model.
Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes.
NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers.
"We understand the community's frustration at the growth of the illicit tobacco market," he said.
"These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW.
"We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk.
"This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said.
Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise.
He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market.
Mr Park said he wanted to take action regardless.
"I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said.
If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055.
Three separate tobacconists. Three packs of black market cigarettes.
$15 each. Cash only. No questions asked.
An illegal vape at one of those NSW south coast businesses was a little pricier at $65. The only question was what flavour was preferred.
With the three packs of Manchester 20s and the Ali Barbar 'Blueberry Blast' vape in hand, two police officers walking the beat are approached.
They say to take it up with health authorities.
Concerns are then raised with Eden-Monaro MP Kristy McBain's office staff.
They promise to raise the issue with the federal minister.
But for Cobargo Hotel owner Dave Allen, it's the policies of the government that have led to the exponential growth in illicit tobacco.
He isn't the only one with that opinion.
Former federal police and Australian Border Force officer Rohan Pike says the government's tobacco excise was directly responsible for the "billion-dollar" black market.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market," Mr Pike told ACM.
However, federal MPs on the South Coast are not backing down from the "importance" of the tobacco excise in curbing smoking rates.
ACM caught up with multiple voices on this widespread and damaging issue. It's also one on which we want to hear more from our readers.
Comments are open at the bottom of the article, or email [e-mail].
Mr Allen has been trying to get action on the widespread sale of illicit tobacco and illegal vapes across the South Coast for several years, but has been hitting brick walls at every turn.
In order to dissuade smokers, tobacco prices have been driven by a federal excise topping $1.40 a cigarette, with the average pack of 20 costing about $40.
Mr Allen said a further increase in the excise was coming in September to take that figure even higher.
However, while the excise had increased from $16 to $28 a pack in six years, total revenue was going backward as consumers turned to the black market.
And while once thought of as a potential avenue for quitting more-harmful cigarettes, vapes have been banned and only permitted to be sold under certain circumstances through pharmacies.
"It's just madness," Mr Allen said.
"None of this makes any sense.
"As a community member, as a business owner, as a parent, I don't see any upside to any of this at all, with any of these policies."
The damaging health outcomes of smoking are widely known - increased risk of cancers, heart disease, stroke, diabetes, chronic respiratory issues and reduced life expectancy among others.
Tobacco use remains the leading cause of preventable death in Australia and is estimated to kill more than 24,000 Australians each year.
Vapes and e-cigarettes are not much better. Their use has been linked to permanent lung damage, harm to developing adolescent brains, affected mental health, and the risk of poisoning and DNA damage from toxic chemicals contained within (other than the highly addictive nicotine).
However, the growth in illicit tobacco products and illegal vapes has had a devastating effect on the small business sector as well.
Venues like the Cobargo Hotel, which sell cigarettes legally, have experienced significant drops in revenue at the same time as copping an ever-increasing cost of doing business.
"We regularly turned over $50,000 a week in our bottle shop - that's now down to $35-40,000 because we've lost tobacco sales," Mr Allen said.
"They've gone to about 30 or 40 per cent [sales] on what they were.
"And we've lost so much foot traffic because people aren't coming in to get their cigarettes, so they're not getting their six-pack of beer, or bottle of wine, or their loaf of bread or meal or whatever else they would normally get.
"We worked out it's costing us in profit about $2000 a week."
There have also been issues with insurance premiums and coverage for anyone selling tobacco amid alleged links to organised crime and hundreds of fire-bombings of premises in capital cities.
"Anyone who sells tobacco, they're starting to just clamp down, either refusing coverage or jumping it up again," Mr Allen said.
"If our sales continue to plummet, I'll just get to the point where it's [a tobacco licence] not worth having.
"So then the only places people will be able to get tobacco are the illegal places.
"And even if they do have this big crackdown and they start shutting some of these shops down, the crooks just change the business model.
"They'll go to a garage, they'll go to houses, they'll go to street dealers, they'll go to Snapchat dealers. So it'll be just like illicit drugs."
Rohan Pike is a former federal police officer who helped set up the Australian Border Force's tobacco strike team in 2015.
He now runs a consulting firm with advice on illicit international trade as one of its key activities.
"I was among the first to discover how big the problem really was," Mr Pike told ACM.
"It's billions of dollars - the illicit rate is well over 50 per cent of the [tobacco] market."
That market share has a significant impact on federal government excise revenue, he said.
While the federal government looks to curb smoking figures by ever-increasing excises, the revenue is plummeting as consumers turn to the cheaper illicit options.
"Tobacco excise revenue was around $16.5billion four or five years ago," Mr Pike said.
"It's $7.4billion now and could go significantly lower than that.
"It's just fallen off a cliff - the government's approach is failing at every level."
Submissions to a parliamentary inquiry into the illegal tobacco trade close this week (August 15), with Mr Allen and Mr Pike among those making written submissions.
"We're not going to be able to arrest our way out of this," Mr Pike said.
"The government is looking for policy 'wins' without any care for the consequences.
"You could bring in a licensing regime and store closures. But, for example, if all petrol stations in one town were found to be selling illicit cigarettes and get closed down, what's going to happen then?"
The focus on supply was also a bone of contention for Mr Allen.
"This whole problem would be solved relatively quickly if we took the approach of treating smoking as a health issue and implemented policies that promote harm minimisation and reducing demand, rather than trying to crush supply, an approach which has failed on all levels," he said.
"We want to get smoking rates down, absolutely. But you've got to do it in a sensible way.
"Treat smoking as a health problem, like we should be doing with drugs, not as a compliance issue
"We can't control the supply. You've just seen that.
"It's like trying to put the genie back in the bottle."
Margaret (not her real name) is a Far South Coast smoker who now sources her fix through illicit sellers.
She told ACM she used to spend around $300-400 a week on cigarettes. Now she can get a carton of 10 20-packs for $60.
"I kind of wish I'd never started, of course. But I've been smoking for over 60 years and I'm not going to stop now.
"This is the only way I can continue.
"I don't enjoy supporting criminal gangs, but I think the government's been so greedy, they force people into it," Margaret said.
"It's got nothing to do with health now, or trying to dissuade people because of its health hazard - which I know it is - it's just revenue raising.
"And it's forcing people like me, who are law-abiding people, to go and break the law."
Margaret said the government's "greed" was hurting the people least able to afford it.
"It's mainly socially disadvantaged people that smoke, sadly, and they're the ones that are being forced into this situation.
"I don't really feel guilty about it. I'm sort of angry at the government for being so greedy and making the price so ridiculous."
She had a message for businesses struggling with the loss of legitimate sales and ever-increasing costs.
"I think that the people retailing [tobacco products] at the correct price, they just should stop stocking them actually." Margaret said.
"I mean, cigarettes have never been a big big profit maker. And they're expensive to have, like, you've got to pay a special premium on tobacco in your insurance policy.
"So I guess they should just stop selling them."
ACM asked federal MPs on the South Coast what the government was doing to halt the trade in illicit tobacco products and whether it agreed with calls that the excise increases were having detrimental effects.
A spokesperson for Eden-Monaro MP Kristy McBain said the tobacco excise was "an important public health measure to encourage people to give up smoking".
The spokesperson argued that part of the reason the excise revenue was down was because more people had given up smoking.
However, they also acknowledged "the significant problem of illegal tobacco" was another part of the reason.
While Member for Gilmore Fiona Phillips was silent on the excise issue, she said the government had a "comprehensive approach to tobacco control under the National Tobacco Strategy".
"I understand the impact illegal tobacco and vaping can have on local families, especially young people, so I'm really pleased that our government is committed to stemming the illicit trade of tobacco in Australia," Ms Phillips told ACM.
"We're boosting capacity at our borders and have invested $350million to tackle the black market in the last two years alone."
Ms McBain's office spokesperson said the federal government was working with the states and territories when it came to enforcement, "resourcing states to undertake more prosecutions".
"The Albanese government is taking on Big Tobacco on the one hand, and organised crime on the other, which continues to use vapes and illicit tobacco as a ready source of revenue to fund all their other criminal activities," they said.
"We are committed to stemming the illicit trade of tobacco in Australia and continue to invest into boosting capacity to combat illicit trade at the border and deliver a coordinated, multi-agency, multi-jurisdictional response.
"And the government recently appointed the interim Illicit Tobacco and E-cigarette Commissioner (ITEC) within the Australian Border Force to support the development and implementation of national strategies for the enforcement of illicit tobacco."
As NSW Parliament resumed last week, among the first orders of business was the introduction of legislation to "disrupt" the illicit tobacco and illegal vape business model.
Described as "the toughest in the country", the new laws include forced shop closures, and maximum penalties of $1.5million and seven years' imprisonment for the sale of illegal tobacco and vapes.
NSW Health Minister Ryan Park also said the government would be looking into the option of making it an offence for landlords to knowingly lease to illegal tobacco and vape suppliers.
"We understand the community's frustration at the growth of the illicit tobacco market," he said.
"These will be among the toughest penalties in the country and will send a clear message to bad actors that selling illegal tobacco and vaping goods will not be tolerated in NSW.
"We are disrupting the business model of the large-scale criminals who profit from addiction, tax evasion, and putting young people at risk.
"This isn't just a serious health issue, it's about fairness, because these illegal operators are undercutting small businesses that are doing the right thing," Mr Park said.
Premier Chris Minns was on record calling for the federal government to reduce the tobacco excise.
He argued the significant increase in the cost of legal cigarettes had pushed consumers to the black market.
Mr Park said he wanted to take action regardless.
"I don't have the time, nor do I have the patience, to wait around to see if there's going to be any more movement on a federal excise," he said.
If you think a tobacco or e-cigarette retailing law has been broken by a retailer in NSW, you can report this to your local Public Health Unit by calling 1300 066 055.