2 days ago
Insurers say it's become 'almost impossible' to find cover for tobacconists after string of arson attacks
An insurance broker says it has become "almost impossible" to find cover for stores that sell tobacco products after they've become a target for arson in the past year.
Queensland police have investigated at least a dozen attacks on tobacconists since early 2024, believed to be part of broader gangland conflict over the illicit tobacco trade.
Consolidated Insurance Brokers director Jeffrey Forbes said insurers have started to "tighten up their appetite" for businesses selling tobacco in the last 18 months.
Mr Forbes said a commercial property that was originally $7,000 to cover is now being quoted at more than $25,000.
Stores that were a part of a strata agreement were also proving complicated to insure.
"For an industrial mid-to-high risk property that was worth about $20 million we might've seen a premium of between $40,000 to $60,000 and expected that to be normal," said Mr Forbes.
"This one was coming in at about $220,000."
Mr Forbes said increased insurance costs were then passed along to other businesses in the complex in the form of increased strata fees.
"That tenant has an absolute right to be there and to operate their shop, but them being there is now potentially costing all the other lot owners thousands of dollars and they could be doing absolutely nothing wrong," he said.
Ben Tran who owns a tobacconist franchise in Ipswich, west of Brisbane, said his business insurance costs have jumped at least 30 per cent.
"It's getting really tough. I've got mates who can't even get insurance for their shop, and they're stuck because that's a requirement from the landlord," he said.
He said paying for security upgrades to his store, such as installing bollards out the front to prevent ramraids, security screens, and "smoke cloaks" could help.
"It might lower the premium a little bit but it still won't guarantee anything," he said.
Mr Tran said the price hikes combined with a plunge in cigarette sales, which he estimated were about 40 per cent in the last six months alone, meant the industry was reeling.
Mr Forbes said it was an Australia-wide problem.
"Different states are taking different approaches but as far as insurers are concerned, they're all lumping them together as being the same problem," he said.
He said it was an issue he had seen before with tattoo parlours.
"Tattooists were immediately associated with motorcycle gangs and insurers all turned off the taps and just said, we're not covering it," he said.
Mr Forbes said for many insurers it was just a matter of "running the figures."
"They just know that this is high risk at the moment and it's too hard to work out who's legit and who might be doing something illegal, so it's just easier to turn off the tap," he said.
A spokesperson for the Insurance Council of Australia encouraged business owners to shop around or use a broker.
"There have been a number of widely reported incidents regarding tobacconists and the illegal tobacco trade. Some insurers may be taking this into account when pricing or offering insurance for commercial landlords and businesses."
Shops neighbouring the stores selling tobacco said they were also feeling the effects.
Estie Dercksen's South African grocery store in Logan was badly damaged when the tobacconist next door was set on fire during an alleged arson attack that left two men in hospital last month.
Ms Dercksen said they lost more than $70,000 worth of stock and $40,000 worth of equipment.
She said they were planning to rebuild but "never again" next to a store that sold tobacco.
The violence has been an "ongoing issue" that Ms Dercksen said had seen their insurance costs rise too.
"Three weeks after we started the lease, we had a brick thrown through our back window from people trying to get access to the tobacconist," she said.
Earlier this year her store was rammed by a car allegedly filled with fuel cans, which the driver then attempted to set alight.
While Victoria has been the epicentre of the gangland conflict — with police confirming more than 100 arson attacks — Queensland has seen an increase.
Taskforce Masher was established early last year specifically to investigate the trade in illicit tobacco in Queensland and has investigated more than a dozen attacks from Logan to Mt Isa.
In May, the Crisafulli government introduced legislation that would see landlords who knowingly lease buildings to illicit tobacco and vape traders face one year imprisonment or more than $160,000 in fines.
