12 hours ago
What's the deal with Sydney's tobacco shop boom? Here's what we know
No, you're not imagining it – there's a proliferation of shops selling tobacco products and nicotine vapes in your neighbourhood. Yes, even in close proximity to local schools. Across Sydney, nearly 20,000 businesses are now selling tobacco – both legal and illicit. This, despite just 10 per cent of Australians being smokers.
Take Newtown, for instance. We love its cool cafés and quirky shops selling everything from boho clothing to boutique homewares. But an investigative piece in the Sydney Morning Herald has revealed that Newtown's main drag now has around 20 tobacco outlets – many of which are selling black-market cigarettes from behind boarded-up windows and makeshift counters.
The article revealed that for every McDonald's restaurant in Sydney, there are 60 tobacco retailers. At outlets like 'Red Shop' in Newtown, business is booming – despite its sparse interiors and lack of clear signage. A plywood cut-out serves as the main point of sale, with overseas brands like Manchester and Double Happiness sold for as little as $15. Legal cigarettes cost closer to $50 and are often unavailable in many of these tobacco shops.
The rise in tobacconists is not just a Newtown problem. According to industry reports, illicit tobacco now accounts for 40 per cent of national consumption, up from 28.6 per cent the previous year. The price gap and lack of enforcement have created a thriving underground market, costing the federal government an estimated $6.7 billion in lost excise duties last year alone.
Authorities are scrambling to respond. NSW Health inspectors seized 13.2 million cigarettes and 3,300kg of tobacco in 2023 and now have new licensing schemes. Fines now reach up to $154,000 for selling black-market tobacco, and penalties for selling to minors have more than doubled.
But critics argue these efforts are too little, too late. Many tobacconists are happy to pay above-market rents which means legitimate businesses are being priced out. Inner West mayor Darcy Byrne is pushing for tighter planning rules that would require new tobacconists to submit development applications, especially near schools.
Some of Sydney's most successful tobacconists are part of large franchise networks like TSG, owned by tobacco tycoons Ahmad Sabbagh, Muh'd Al Zoubi, and Ghaith Jaradat. Together, they have a part or shared interest in about 30 TSG Station tobacconists in prime areas like the CBD, Balmain, Potts Point, and Bondi Beach. Court records show that all three men have upcoming local court appearances to answer allegations of the sale of illicit tobacco products in their stores.
Concerns around public safety are also mounting, with recent firebombings in Auburn and Mount Pritchard raising fears that Sydney may be on the verge of its own 'tobacco wars' like those seen in Melbourne. NSW Police's Strike Force is currently investigating alleged links between organised crime and the illicit trade, including the Alameddine crime network.
