Australia doesn't have too many car brands, says one of its newest arrivals
Speaking at the launch of the Omoda 9 plug-in hybrid SUV – the priciest model yet from the fledgling Omoda Jaecoo brand – chief operating officer Roy Muñoz said having more brands benefits Australian new car buyers.
"It's a good question," Mr Muñoz told media, including CarExpert when asked about launching a new marque to compete with more than 70 existing brands in Australia's relatively small sales market of around 1.2 million vehicles annually.
"I think there's always room for new technology, a new brand – whether it's brand new or not – but new technology, certainly, and a different market position for Omoda Jaecoo."
CarExpert can save you thousands on a new car. Click here to get a great deal.
"I welcome competition because it breeds innovation, improves everyone's product offering and it gives more choice for Australians."
Omoda Jaecoo – pitched as being more upmarket than Chery's namesake brand – was announced in Australia earlier this year, with the Omoda name previously used on the Chery Omoda 5 and Omoda E5 SUVs that are now known as the Chery C5 and E5 respectively.
It joins a raft of new and emerging makes including Zeekr, Denza and likely others in an already saturated Australian new car market.
"In terms of do we need another brand – well I think it's great that Australians are spoilt for choice, right – and we'll let them decide what suits their lifestyles and what suits their driving," Mr Muñoz said.
"Omoda and Jaecoo obviously speak to different customers and market to different positioning of the product itself [compared to Chery]."
"If you can find your niche – which we're still in the process of identifying our customer – but if you can do that… and, looking beyond the product itself, where you can differentiate your brand rather than just looking at the physical product."
While the brand is called Omoda Jaecoo, the brand sells a variety of vehicles with either Omoda or Jaecoo badging with the latter having more traditional SUV styling.
Omoda Jaecoo is one of almost a dozen of brands Chery offers in various countries around the world, which includes Exeed, Jetour and iCaur.
While Chery Australia hasn't confirmed any additional brands – telling CarExpert it's currently focused on its Chery and Omoda Jaecoo brands – it hasn't ruled out adding to its offering in future.
When asked about iCaur, which recently unveiled its Toyota LandCruiser-rivalling V27 large SUV, Mr Muñoz wouldn't confirm or reject the brand coming to Australia.
"It comes back to – if you find your niche, you find your customer, anything can work."
MORE: 2025 Omoda 9: Chery group's priciest model yet in Australia is a 395kW PHEV SUV
MORE: What is Omoda Jaecoo, and how is this new brand different to Chery?
Content originally sourced from: CarExpert.com.au
Australia has room for more car brands despite an influx of new automakers, according to Omoda Jaecoo's chief operating officer, but parent company Chery isn't imminently adding more to its local product offering.
Speaking at the launch of the Omoda 9 plug-in hybrid SUV – the priciest model yet from the fledgling Omoda Jaecoo brand – chief operating officer Roy Muñoz said having more brands benefits Australian new car buyers.
"It's a good question," Mr Muñoz told media, including CarExpert when asked about launching a new marque to compete with more than 70 existing brands in Australia's relatively small sales market of around 1.2 million vehicles annually.
"I think there's always room for new technology, a new brand – whether it's brand new or not – but new technology, certainly, and a different market position for Omoda Jaecoo."
CarExpert can save you thousands on a new car. Click here to get a great deal.
"I welcome competition because it breeds innovation, improves everyone's product offering and it gives more choice for Australians."
Omoda Jaecoo – pitched as being more upmarket than Chery's namesake brand – was announced in Australia earlier this year, with the Omoda name previously used on the Chery Omoda 5 and Omoda E5 SUVs that are now known as the Chery C5 and E5 respectively.
It joins a raft of new and emerging makes including Zeekr, Denza and likely others in an already saturated Australian new car market.
"In terms of do we need another brand – well I think it's great that Australians are spoilt for choice, right – and we'll let them decide what suits their lifestyles and what suits their driving," Mr Muñoz said.
"Omoda and Jaecoo obviously speak to different customers and market to different positioning of the product itself [compared to Chery]."
"If you can find your niche – which we're still in the process of identifying our customer – but if you can do that… and, looking beyond the product itself, where you can differentiate your brand rather than just looking at the physical product."
While the brand is called Omoda Jaecoo, the brand sells a variety of vehicles with either Omoda or Jaecoo badging with the latter having more traditional SUV styling.
Omoda Jaecoo is one of almost a dozen of brands Chery offers in various countries around the world, which includes Exeed, Jetour and iCaur.
While Chery Australia hasn't confirmed any additional brands – telling CarExpert it's currently focused on its Chery and Omoda Jaecoo brands – it hasn't ruled out adding to its offering in future.
When asked about iCaur, which recently unveiled its Toyota LandCruiser-rivalling V27 large SUV, Mr Muñoz wouldn't confirm or reject the brand coming to Australia.
"It comes back to – if you find your niche, you find your customer, anything can work."
MORE: 2025 Omoda 9: Chery group's priciest model yet in Australia is a 395kW PHEV SUV
MORE: What is Omoda Jaecoo, and how is this new brand different to Chery?
Content originally sourced from: CarExpert.com.au
Australia has room for more car brands despite an influx of new automakers, according to Omoda Jaecoo's chief operating officer, but parent company Chery isn't imminently adding more to its local product offering.
Speaking at the launch of the Omoda 9 plug-in hybrid SUV – the priciest model yet from the fledgling Omoda Jaecoo brand – chief operating officer Roy Muñoz said having more brands benefits Australian new car buyers.
"It's a good question," Mr Muñoz told media, including CarExpert when asked about launching a new marque to compete with more than 70 existing brands in Australia's relatively small sales market of around 1.2 million vehicles annually.
"I think there's always room for new technology, a new brand – whether it's brand new or not – but new technology, certainly, and a different market position for Omoda Jaecoo."
CarExpert can save you thousands on a new car. Click here to get a great deal.
"I welcome competition because it breeds innovation, improves everyone's product offering and it gives more choice for Australians."
Omoda Jaecoo – pitched as being more upmarket than Chery's namesake brand – was announced in Australia earlier this year, with the Omoda name previously used on the Chery Omoda 5 and Omoda E5 SUVs that are now known as the Chery C5 and E5 respectively.
It joins a raft of new and emerging makes including Zeekr, Denza and likely others in an already saturated Australian new car market.
"In terms of do we need another brand – well I think it's great that Australians are spoilt for choice, right – and we'll let them decide what suits their lifestyles and what suits their driving," Mr Muñoz said.
"Omoda and Jaecoo obviously speak to different customers and market to different positioning of the product itself [compared to Chery]."
"If you can find your niche – which we're still in the process of identifying our customer – but if you can do that… and, looking beyond the product itself, where you can differentiate your brand rather than just looking at the physical product."
While the brand is called Omoda Jaecoo, the brand sells a variety of vehicles with either Omoda or Jaecoo badging with the latter having more traditional SUV styling.
Omoda Jaecoo is one of almost a dozen of brands Chery offers in various countries around the world, which includes Exeed, Jetour and iCaur.
While Chery Australia hasn't confirmed any additional brands – telling CarExpert it's currently focused on its Chery and Omoda Jaecoo brands – it hasn't ruled out adding to its offering in future.
When asked about iCaur, which recently unveiled its Toyota LandCruiser-rivalling V27 large SUV, Mr Muñoz wouldn't confirm or reject the brand coming to Australia.
"It comes back to – if you find your niche, you find your customer, anything can work."
MORE: 2025 Omoda 9: Chery group's priciest model yet in Australia is a 395kW PHEV SUV
MORE: What is Omoda Jaecoo, and how is this new brand different to Chery?
Content originally sourced from: CarExpert.com.au
Australia has room for more car brands despite an influx of new automakers, according to Omoda Jaecoo's chief operating officer, but parent company Chery isn't imminently adding more to its local product offering.
Speaking at the launch of the Omoda 9 plug-in hybrid SUV – the priciest model yet from the fledgling Omoda Jaecoo brand – chief operating officer Roy Muñoz said having more brands benefits Australian new car buyers.
"It's a good question," Mr Muñoz told media, including CarExpert when asked about launching a new marque to compete with more than 70 existing brands in Australia's relatively small sales market of around 1.2 million vehicles annually.
"I think there's always room for new technology, a new brand – whether it's brand new or not – but new technology, certainly, and a different market position for Omoda Jaecoo."
CarExpert can save you thousands on a new car. Click here to get a great deal.
"I welcome competition because it breeds innovation, improves everyone's product offering and it gives more choice for Australians."
Omoda Jaecoo – pitched as being more upmarket than Chery's namesake brand – was announced in Australia earlier this year, with the Omoda name previously used on the Chery Omoda 5 and Omoda E5 SUVs that are now known as the Chery C5 and E5 respectively.
It joins a raft of new and emerging makes including Zeekr, Denza and likely others in an already saturated Australian new car market.
"In terms of do we need another brand – well I think it's great that Australians are spoilt for choice, right – and we'll let them decide what suits their lifestyles and what suits their driving," Mr Muñoz said.
"Omoda and Jaecoo obviously speak to different customers and market to different positioning of the product itself [compared to Chery]."
"If you can find your niche – which we're still in the process of identifying our customer – but if you can do that… and, looking beyond the product itself, where you can differentiate your brand rather than just looking at the physical product."
While the brand is called Omoda Jaecoo, the brand sells a variety of vehicles with either Omoda or Jaecoo badging with the latter having more traditional SUV styling.
Omoda Jaecoo is one of almost a dozen of brands Chery offers in various countries around the world, which includes Exeed, Jetour and iCaur.
While Chery Australia hasn't confirmed any additional brands – telling CarExpert it's currently focused on its Chery and Omoda Jaecoo brands – it hasn't ruled out adding to its offering in future.
When asked about iCaur, which recently unveiled its Toyota LandCruiser-rivalling V27 large SUV, Mr Muñoz wouldn't confirm or reject the brand coming to Australia.
"It comes back to – if you find your niche, you find your customer, anything can work."
MORE: 2025 Omoda 9: Chery group's priciest model yet in Australia is a 395kW PHEV SUV
MORE: What is Omoda Jaecoo, and how is this new brand different to Chery?
Content originally sourced from: CarExpert.com.au
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Sydney Morning Herald
8 minutes ago
- Sydney Morning Herald
The quiet partnership behind a $1 billion superannuation collapse
As the sun set on 2018, two little-known fund managers were toasting the property deal of a lifetime – the bargain-basement purchase of a sprawling resort overlooking the Coral Sea in Port Douglas. The men, Falcon Capital's David Anderson and Paul Chiodo of Keystone Asset Management, had big dreams of turning the tired three-star hotel into a six-star luxury resort the likes of which had never been seen on Australian shores. Two years later, Chiodo and Anderson pulled off a coup by signing major hotel chain Accor to bring the first-ever ultra-luxury Fairmont resort to Australia and recruiting celebrity gardener Jamie Durie to help design the incredible complex. It would mark the start of a six-year rollercoaster business relationship between Anderson and Chiodo that ended in more public ignominy than either could have imagined. They are now under investigation by the corporate watchdog for criminal and civil breaches of their responsibilities as fund managers, including fraud, according to thousands of pages of documents filed in the Federal Court. The Australian Securities and Investments Commission (ASIC) compiled the dossier to convince a judge to freeze the assets of both men and ban them from leaving the country. The regulator has yet to launch substantive court proceedings against any of the players, and may not, but to win the orders, which are regarded as draconian, it had to show it would have a good case. Chiodo and Anderson did not appear at the hearings to oppose ASIC's applications but both deny the allegations, and neither has been charged as a result of ASIC's long-running investigation. Chiodo and Falcon (Anderson's company) both separately sought to stop liquidators taking control of their business, claiming they had been unfairly targeted. Anderson did consent to receivers being appointed over his personal assets, including his home, in April. What the public has not been aware of before is that Chiodo and Anderson have long been business partners and worked together to sow the seeds for what would become a $1 billion superannuation disaster for 12000 people across the country. Anderson's First Guardian Master Fund and Falcon Capital businesses have collapsed, likely wiping out the entirety of the $446 million in retirement savings invested in the fund. Chiodo's similarly sized Shield Master Fund and Keystone business have also collapsed, putting at risk $480 million in superannuation of their 6000 clients. ASIC suspects much of the super savings in the two funds had been squandered on pet projects, luxury cars and what the regulator says are unusual payments to the men's private companies. Both men have denied these allegations, saying ASIC has misunderstood their businesses and that its suspicions of mismanagement are unfounded and unfair. This masthead is not suggesting those allegations are true, just that they have been made as part of ASIC's long-running and ongoing investigation into the men. Liquidators are now picking through the wreckage of each group and have found many of the investments made by Anderson and Chiodo 'have no value', and returns for investors, particularly in the First Guardian business, are expected to be as low as 20 cents in the dollar or less. Now an investigation by this masthead has found deep ties between the men. Drawing from 7000 documents filed by the regulator in its cases against the men and information provided by more than a dozen sources working within associated businesses or familiar with the ASIC investigation, this masthead can reveal the two had for seven years been business partners and co-investors, including in six different property projects and investment group CF Capital. Anderson also invested one-fifth of First Guardian's funds – or $95 million – into Chiodo's property business and helped him restructure when it got into financial trouble in 2021. It can also be revealed that Anderson and Chiodo used the same investment scheme marketers and financial planners to promote their now failed funds as part of a plan to allow Anderson to recoup that $95 million investment in Chiodo's business. Chiodo confirmed to this masthead that he and Anderson had been joint venture partners in a range of projects over several years. But he insisted that - other than the $95 million investment - there were no existing ties between their businesses or the use of the same group of investment promoters, including financial planning group Venture Egg boss Ferras Merhi. He also said that he and Anderson had not been on good terms since around 2021. 'It's not linked, they [the funds] are not linked, it was not a case of 'hey Ferras can you help us out with our problem?'. There were separate agreements,' Chiodo said. The business partnership between Chiodo and Anderson brought together two different skill sets. Blue blood Anderson, 43, moved in the worlds of investment banking and high finance. At the age of 20 he told the Herald Sun that, while watching the 2000 tech stocks crash on the large electronic sharemarket boards in the foyer of the ASX building, he had predicted the rout: 'At least this crash is going to knock some sense into people.' After joining Falcon, by 2018 Anderson – a fine dining and craft beer fanatic – had amassed a large portfolio of farming land and wanted more deals, focusing his sights on property in Port Douglas. Chiodo, a man with equally large aspirations, was there to help. From a blue-collar background, Chiodo had been working in property development for years, initially in mid-sized residential projects in Melbourne and a high-end set of apartments in Port Douglas. He was also looking for new deals, and when the large resort property in the tropical idyll came on the market in late 2018, the pair agreed to team up to buy it. Loading The $300 million project would need a lot of money to succeed. To help fulfil the dream development, Anderson and Chiodo set up a property fund to bring in new investors. That fund would hold the Port Douglas resort project, five of Chiodo's smaller-scale residential developments in the holiday town and smaller ones in the Melbourne suburbs of Glenroy, Ashburton, Bentleigh and Doncaster East. Anderson's First Guardian would manage the fund as trustee, invest $95 million and help bring in investors and grow the fund to $500 million. In 2019, Anderson and Chiodo set up another business, CF Capital. It was owned by First Guardian, operated by Chiodo and licensed under Falcon's financial services licence. Chiodo told this masthead that, at the time, he and Anderson relied on the marketing skills of Sean Niven, a former senior manager within collapsed property investment group Westpoint, to draw customers into the fund. Niven had introduced the two men, Chiodo told this masthead. At the time, Niven had just exited bankruptcy, and it is not suggested he handled money for either Chiodo or Anderson. Years later Niven would be banned from working in financial services. Niven is not under investigation by ASIC in relation to the current scheme, and not accused of wrongdoing in relation to it. The arrangement between the trio was going well until about mid-2021, when the pandemic inflated costs and pushed out the timelines of the fund's property projects. Niven has also pleaded guilty to lying to his bankruptcy trustee in 2020. Soon cracks emerged between Anderson and his board over First Guardian's hefty investment in the Chiodo fund, documents obtained by this masthead indicate. Under pressure from Anderson's board at Falcon Capital, Anderson and Chiodo decided to cut most of the ties between the two groups – First Guardian would sell the CF business and pass on oversight of Chiodo's fund to Chiodo. Minutes from a Falcon board meeting in February 2022 show the relationship between Chiodo and Falcon's board had frayed and that Anderson told the Falcon board he would sever ties with Chiodo. 'The [Chiodo fund] was restructured due to its dire financial position. The handover of trustee services went well,' the minutes note. They also record an audit report had deemed the fund 'insufficient and inconclusive'. The minutes show Chiodo initiated a statutory demand in the Supreme Court of Victoria against First Guardian for not making payments to him as required under their business arrangements. 'This was deemed … to be delusional, and highly unlikely to succeed. Chiodo played down this pathway to avert his creditors from going after him and to divert attention toward First Guardian. FGC [First Guardian Capital] was ahead in terms of its investment flows ... FGC was not in a debt position but rather equity. 'DA [David Anderson] stated that Chiodo had withdrawn the Stat Demand. 'It is now deemed that [Chiodo] is a hostile manager and that a full redemption program would be set in train by DA.' This masthead asked Chiodo if his fund was in trouble and that was why he made the claim. Loading 'What a load of crap!!! This was purely FGC [First Guardian Capital] not willing to honour our settlement agreement,' he said. Anderson would go on to devise a redemption plan to recoup First Guardian's investment in Chiodo's fund by quickly driving thousands of customers into Chiodo's business. Details of this plan have been confirmed by three sources familiar with First Guardian business and correlate with Falcon's board minutes and a timeline presented by ASIC to the court as part of its actions against Chiodo and Anderson. Under the plan, Chiodo established the Shield Master Fund to bring in new investors. That new fund then absorbed Chiodo's financially troubled property investment vehicle. To supercharge the business, Anderson put Chiodo in touch with Merhi and his business partner Osama 'Sammy' Saad. Merhi and Saad would bring in social media marketing expert Rashid Alshakshir, the former business partner of feared outlaw bikie Hasan Topal. Alshakshir, Merhi and Saad would devise a customer funnel, using social media ads encouraging people to 'find their lost super' or consolidate multiple accounts. Ultimately, it drove customers to Merhi and Saad's financial planning business and then onto Chiodo and Anderson's funds. There is no suggestion that Merhi, Saad and Alshakshir had knowledge of the fund's investments or any misuse of their clients' money, only that ASIC is investigating whether they breached obligations to their clients as financial advisers. As Chiodo's fund grew to $480 million, Anderson had the chance to recoup First Guardian's $95 million in the fund. He never did. Chiodo insisted to this masthead that his and Anderson's use of the same marketing strategy was not a joint plan. Instead, he said: 'David was trying to convince Ferras to allocate a greater portion [of customers] to his fund in order to cover David's need for the redemption.' Anderson and Chiodo would pay out $100 million – or 10 per cent of the money invested with them – to their marketing crew, who now drove Bentleys and other flash cars and had upgraded to lovely homes in Melbourne's better northern suburbs. As the funds swelled with super savings, both men allegedly went on a spending spree using other people's money. Anderson bought a dream home in Melbourne's leafy Hawthorn overlooking the Yarra River and pumped millions into fine dining restaurants via a business arrangement with celebrity chef Scott Pickett and, separately, set up two restaurants in inner Melbourne, one a South-east Asian eatery with 18 craft beers on tap. Chiodo would burn millions pulling together a portfolio of wish-list luxury development proposals in K'gari, Fiji and Venice, rent a corporate box at the MCG and host events with sporting stars like Floyd Mayweather and Josh Giddey. When ASIC came knocking on Chiodo's door in late 2023, Anderson was suddenly focused on First Guardian's investment in the Chiodo fund. In May 2024 Anderson attempted to sell the investment to an American group which never paid, and the investment remained within the Shield fund. Whether that investment, like many others made by Anderson and Chiodo, will ever be reclaimed for investors remains to be seen. Loading As for the property in Port Douglas, despite Chiodo claiming to have spent more than $70 million on works to build the resort, the project was never developed. Earlier this year receivers appointed agents to sell the property on behalf of its lenders. No return is expected for Chiodo's investors from the sale.
The Age
8 minutes ago
- The Age
The quiet partnership behind a $1 billion superannuation collapse
As the sun set on 2018, two little-known fund managers were toasting the property deal of a lifetime – the bargain-basement purchase of a sprawling resort overlooking the Coral Sea in Port Douglas. The men, Falcon Capital's David Anderson and Paul Chiodo of Keystone Asset Management, had big dreams of turning the tired three-star hotel into a six-star luxury resort the likes of which had never been seen on Australian shores. Two years later, Chiodo and Anderson pulled off a coup by signing major hotel chain Accor to bring the first-ever ultra-luxury Fairmont resort to Australia and recruiting celebrity gardener Jamie Durie to help design the incredible complex. It would mark the start of a six-year rollercoaster business relationship between Anderson and Chiodo that ended in more public ignominy than either could have imagined. They are now under investigation by the corporate watchdog for criminal and civil breaches of their responsibilities as fund managers, including fraud, according to thousands of pages of documents filed in the Federal Court. The Australian Securities and Investments Commission (ASIC) compiled the dossier to convince a judge to freeze the assets of both men and ban them from leaving the country. The regulator has yet to launch substantive court proceedings against any of the players, and may not, but to win the orders, which are regarded as draconian, it had to show it would have a good case. Chiodo and Anderson did not appear at the hearings to oppose ASIC's applications but both deny the allegations, and neither has been charged as a result of ASIC's long-running investigation. Chiodo and Falcon (Anderson's company) both separately sought to stop liquidators taking control of their business, claiming they had been unfairly targeted. Anderson did consent to receivers being appointed over his personal assets, including his home, in April. What the public has not been aware of before is that Chiodo and Anderson have long been business partners and worked together to sow the seeds for what would become a $1 billion superannuation disaster for 12000 people across the country. Anderson's First Guardian Master Fund and Falcon Capital businesses have collapsed, likely wiping out the entirety of the $446 million in retirement savings invested in the fund. Chiodo's similarly sized Shield Master Fund and Keystone business have also collapsed, putting at risk $480 million in superannuation of their 6000 clients. ASIC suspects much of the super savings in the two funds had been squandered on pet projects, luxury cars and what the regulator says are unusual payments to the men's private companies. Both men have denied these allegations, saying ASIC has misunderstood their businesses and that its suspicions of mismanagement are unfounded and unfair. This masthead is not suggesting those allegations are true, just that they have been made as part of ASIC's long-running and ongoing investigation into the men. Liquidators are now picking through the wreckage of each group and have found many of the investments made by Anderson and Chiodo 'have no value', and returns for investors, particularly in the First Guardian business, are expected to be as low as 20 cents in the dollar or less. Now an investigation by this masthead has found deep ties between the men. Drawing from 7000 documents filed by the regulator in its cases against the men and information provided by more than a dozen sources working within associated businesses or familiar with the ASIC investigation, this masthead can reveal the two had for seven years been business partners and co-investors, including in six different property projects and investment group CF Capital. Anderson also invested one-fifth of First Guardian's funds – or $95 million – into Chiodo's property business and helped him restructure when it got into financial trouble in 2021. It can also be revealed that Anderson and Chiodo used the same investment scheme marketers and financial planners to promote their now failed funds as part of a plan to allow Anderson to recoup that $95 million investment in Chiodo's business. Chiodo confirmed to this masthead that he and Anderson had been joint venture partners in a range of projects over several years. But he insisted that - other than the $95 million investment - there were no existing ties between their businesses or the use of the same group of investment promoters, including financial planning group Venture Egg boss Ferras Merhi. He also said that he and Anderson had not been on good terms since around 2021. 'It's not linked, they [the funds] are not linked, it was not a case of 'hey Ferras can you help us out with our problem?'. There were separate agreements,' Chiodo said. The business partnership between Chiodo and Anderson brought together two different skill sets. Blue blood Anderson, 43, moved in the worlds of investment banking and high finance. At the age of 20 he told the Herald Sun that, while watching the 2000 tech stocks crash on the large electronic sharemarket boards in the foyer of the ASX building, he had predicted the rout: 'At least this crash is going to knock some sense into people.' After joining Falcon, by 2018 Anderson – a fine dining and craft beer fanatic – had amassed a large portfolio of farming land and wanted more deals, focusing his sights on property in Port Douglas. Chiodo, a man with equally large aspirations, was there to help. From a blue-collar background, Chiodo had been working in property development for years, initially in mid-sized residential projects in Melbourne and a high-end set of apartments in Port Douglas. He was also looking for new deals, and when the large resort property in the tropical idyll came on the market in late 2018, the pair agreed to team up to buy it. Loading The $300 million project would need a lot of money to succeed. To help fulfil the dream development, Anderson and Chiodo set up a property fund to bring in new investors. That fund would hold the Port Douglas resort project, five of Chiodo's smaller-scale residential developments in the holiday town and smaller ones in the Melbourne suburbs of Glenroy, Ashburton, Bentleigh and Doncaster East. Anderson's First Guardian would manage the fund as trustee, invest $95 million and help bring in investors and grow the fund to $500 million. In 2019, Anderson and Chiodo set up another business, CF Capital. It was owned by First Guardian, operated by Chiodo and licensed under Falcon's financial services licence. Chiodo told this masthead that, at the time, he and Anderson relied on the marketing skills of Sean Niven, a former senior manager within collapsed property investment group Westpoint, to draw customers into the fund. Niven had introduced the two men, Chiodo told this masthead. At the time, Niven had just exited bankruptcy, and it is not suggested he handled money for either Chiodo or Anderson. Years later Niven would be banned from working in financial services. Niven is not under investigation by ASIC in relation to the current scheme, and not accused of wrongdoing in relation to it. The arrangement between the trio was going well until about mid-2021, when the pandemic inflated costs and pushed out the timelines of the fund's property projects. Niven has also pleaded guilty to lying to his bankruptcy trustee in 2020. Soon cracks emerged between Anderson and his board over First Guardian's hefty investment in the Chiodo fund, documents obtained by this masthead indicate. Under pressure from Anderson's board at Falcon Capital, Anderson and Chiodo decided to cut most of the ties between the two groups – First Guardian would sell the CF business and pass on oversight of Chiodo's fund to Chiodo. Minutes from a Falcon board meeting in February 2022 show the relationship between Chiodo and Falcon's board had frayed and that Anderson told the Falcon board he would sever ties with Chiodo. 'The [Chiodo fund] was restructured due to its dire financial position. The handover of trustee services went well,' the minutes note. They also record an audit report had deemed the fund 'insufficient and inconclusive'. The minutes show Chiodo initiated a statutory demand in the Supreme Court of Victoria against First Guardian for not making payments to him as required under their business arrangements. 'This was deemed … to be delusional, and highly unlikely to succeed. Chiodo played down this pathway to avert his creditors from going after him and to divert attention toward First Guardian. FGC [First Guardian Capital] was ahead in terms of its investment flows ... FGC was not in a debt position but rather equity. 'DA [David Anderson] stated that Chiodo had withdrawn the Stat Demand. 'It is now deemed that [Chiodo] is a hostile manager and that a full redemption program would be set in train by DA.' This masthead asked Chiodo if his fund was in trouble and that was why he made the claim. Loading 'What a load of crap!!! This was purely FGC [First Guardian Capital] not willing to honour our settlement agreement,' he said. Anderson would go on to devise a redemption plan to recoup First Guardian's investment in Chiodo's fund by quickly driving thousands of customers into Chiodo's business. Details of this plan have been confirmed by three sources familiar with First Guardian business and correlate with Falcon's board minutes and a timeline presented by ASIC to the court as part of its actions against Chiodo and Anderson. Under the plan, Chiodo established the Shield Master Fund to bring in new investors. That new fund then absorbed Chiodo's financially troubled property investment vehicle. To supercharge the business, Anderson put Chiodo in touch with Merhi and his business partner Osama 'Sammy' Saad. Merhi and Saad would bring in social media marketing expert Rashid Alshakshir, the former business partner of feared outlaw bikie Hasan Topal. Alshakshir, Merhi and Saad would devise a customer funnel, using social media ads encouraging people to 'find their lost super' or consolidate multiple accounts. Ultimately, it drove customers to Merhi and Saad's financial planning business and then onto Chiodo and Anderson's funds. There is no suggestion that Merhi, Saad and Alshakshir had knowledge of the fund's investments or any misuse of their clients' money, only that ASIC is investigating whether they breached obligations to their clients as financial advisers. As Chiodo's fund grew to $480 million, Anderson had the chance to recoup First Guardian's $95 million in the fund. He never did. Chiodo insisted to this masthead that his and Anderson's use of the same marketing strategy was not a joint plan. Instead, he said: 'David was trying to convince Ferras to allocate a greater portion [of customers] to his fund in order to cover David's need for the redemption.' Anderson and Chiodo would pay out $100 million – or 10 per cent of the money invested with them – to their marketing crew, who now drove Bentleys and other flash cars and had upgraded to lovely homes in Melbourne's better northern suburbs. As the funds swelled with super savings, both men allegedly went on a spending spree using other people's money. Anderson bought a dream home in Melbourne's leafy Hawthorn overlooking the Yarra River and pumped millions into fine dining restaurants via a business arrangement with celebrity chef Scott Pickett and, separately, set up two restaurants in inner Melbourne, one a South-east Asian eatery with 18 craft beers on tap. Chiodo would burn millions pulling together a portfolio of wish-list luxury development proposals in K'gari, Fiji and Venice, rent a corporate box at the MCG and host events with sporting stars like Floyd Mayweather and Josh Giddey. When ASIC came knocking on Chiodo's door in late 2023, Anderson was suddenly focused on First Guardian's investment in the Chiodo fund. In May 2024 Anderson attempted to sell the investment to an American group which never paid, and the investment remained within the Shield fund. Whether that investment, like many others made by Anderson and Chiodo, will ever be reclaimed for investors remains to be seen. Loading As for the property in Port Douglas, despite Chiodo claiming to have spent more than $70 million on works to build the resort, the project was never developed. Earlier this year receivers appointed agents to sell the property on behalf of its lenders. No return is expected for Chiodo's investors from the sale.
The Advertiser
37 minutes ago
- The Advertiser
Black market smokes are burning a hole in small business
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 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 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 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 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.
