Chapter 1: What is the main topic discussed in this episode?
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The illegal tobacco trade has been back in the news lately, with industry experts saying that organised crime is on track to supply all of our tobacco and nicotine products by 2030.
That points to a massive increase in demand for cigarettes and vapes that are smuggled illegally into the country, and it means we're missing out on a heap of public money that would have otherwise been raised through tax. So in this quiz shortcut, we'll take a look at what's happening with the tobacco industry in Australia and what's being done about it.
Squish Shortcuts is the backstory to the big news stories. I'm Alice Dempster.
And I'm Andrew Williams.
Andrew, we did a shortcut on the illegal tobacco trade causing an uptick in crime back in 2024 before you joined the Swizz, but there's been some big developments since then. So we thought we'd go back and check in on where things are at now.
Which is good because I know almost nothing about this topic. So the research has been good to look into. And basically what we've found out is that the problem of illegal tobacco has only ramped up since. Industry experts say that a lot of that is to do with how expensive tobacco products are now. For example...
An average packet of 20 cigarettes costs more than $50 and around $28 to $30 of that, so more than half, is excise or tax that goes to the government.
And that tax on tobacco products has risen sharply over the past decade. If you grew up in the 80s and 90s like I did, you might remember adults paying just a few dollars for a pack of 25s. But there's a reason the government has piled on the tax ever since. It wants people to stop smoking.
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Chapter 2: What is the current state of the illegal tobacco trade in Australia?
Some of the ones for sale under the counter are foreign brands like Manchester, Marlborough or Double Happiness, or they're fakes of popular brands made in places like China, Southeast Asia or the Middle East. And as you say, when it comes to smuggling them in, border force officers and police say that cases of illegal tobacco imports are through the roof.
And the figures back that up. So the international tobacco giant Philip Morris recently warned a parliamentary inquiry that illicit tobacco use is on track to cross the 70% threshold next year in 2027.
And as for who is bringing these products into the country, police say it's organised criminal gangs who are making big bucks by supplying more affordable cigarettes to people who wouldn't otherwise be able to keep up the habit.
So those gangs are being described as the new big tobacco by industry researchers. They've found that illegal tobacco sales in Australia are now on par with and in many cases overtaking those of the big tobacco companies like British American Tobacco and Philip Morris, who you just mentioned.
Which is probably why those companies are speaking up about this illegal trade. It is eating into what would ordinarily be their business. So what you might have heard about in the news is this battle for control of that extremely lucrative market, which has led to a violent turf war between rival criminal gangs. And it's been particularly bad in Victoria.
And that's what we covered in our first shortcut on this topic, the underworld fight, which is known as the tobacco wars. But when we say tobacco wars, it's not just a fight between gangs. Our border force officers are battling every day to stay on top of the huge amount of illegal cigarettes and vapes being smuggled in.
Both police and the border force say a big part of the problem is that the penalties for being caught importing illegal tobacco are a lot lower than being caught importing harder drugs like cocaine or methamphetamine. So it's not as much of a deterrent to avoid bringing them in.
And because the margins in tobacco are so lucrative here, given we're one of the most expensive places to buy cigarettes in the world, the gangs have clearly done the maths on this. If they ship 10 packages and two or three are intercepted, they still pocket a big profit.
And once the illegal products make it past the border, they get distributed around the country. And the job of cracking down on illegal sales then falls to the police and regulators in each state. And it is not an easy job.
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