Taskforce to crack down on illicit tobacco

The Australian Border Force will set up a dedicated taskforce to target and stop the growing problem of illicit tobacco being smuggled into the country.

The establishment of a ‘strike team’ comes in the wake of two record seizures of illicit tobacco in Sydney and Melbourne in the past month that were linked to organised crime syndicates.

“There are clear links to organised crime and we know that groups smuggling illicit tobacco into Australia are also involved in other illegal activities such as narcotics,” Immigration Minister Peter Dutton said at the announcement of the launch last week.

“The ABF is determined to disrupt their activities and the new ABF strike team will focus on the organised crime syndicates behind shipments like this and collect intelligence on their operations.”

Imperial Tobacco Australia Head of Corporate and Legal Affairs Andrew Gregson described the ABF decision as a “monumental step in the right direction of addressing the problem of illicit tobacco in Australia”.

“We commend the Australian Border Force on the announcement of a dedicated strike team focused on illicit tobacco,” he said. “The recent seizures confirm that illicit tobacco in Australia is a major problem. The illegal tobacco supply chain involves organised crime, isn’t concerned with what they’re selling and doesn’t have any qualms about selling to children.

“We’re prepared to work with all interested parties with an interest in successfully combatting these criminal activities undermining our society: state and federal governments, regulators, law-enforcement authorities and tobacco-control lobbyists. Ignoring the problem will only see the use of illicit tobacco continue to grow.

“The illegal tobacco market is now at its highest ever point. It’s 14.5 per cent of total consumption. That’s costing Australian taxpayers $1.35 billion every year in lost excise. The money is going straight into the pockets of well-organised criminals who certainly don’t have the best interests of Australians driving them. As excise on tobacco increases, organised criminals will continue to take advantage of Australia.”

According to Euromonitor International, the illicit trade of tobacco is increasing internationally and growing more sophisticated, causing negative impacts on consumers, governments and licit companies.

Euromonitor International statistics from 2013 reveal that the volume of illicit cigarettes consumed in the world was about 570 billion sticks, with an estimated value of US$39 billion ($54 billion), which was nearly identical to the value of revenues not collected in taxes had the products been sold in the licit market.

Euromonitor International Consulting Manager Lourdes Chavarria says this means governments around the world lost US$40 billion ($55.3 billion) in tax revenue that could have been spent on improving their countries.

“It’s critically important for any stakeholder trying to tackle illicit trade to understand the landscape and structure of the specific illicit market and to consider different factors that can be present depending on local conditions,” she said.

“Illicit trade is costing brand owners and legitimate manufacturers millions of dollars in lost revenues.”

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