Australia’s federal government is set to further escalate the cigarette price war this weekend with a 6.8% increase, pushing the cost of legal cigarettes to unprecedented heights.
This move is widely criticised as pouring “petrol on an already raging and out-of-control fire.” With Australian cigarettes already the most expensive in the world, this price hike is expected to worsen the already dire situation of violent crime and illegal tobacco trade.
The timing of this increase is particularly concerning. Victoria, which will become the only state without a tobacco licensing scheme starting Sunday, is about to face a surge in crime linked to the tobacco black market. Despite recommendations from Better Regulation Victoria in May 2022, the state government has failed to act, leaving service station workers and small business owners increasingly vulnerable to violent crime.
David Inall, chief executive of MGA Independent Businesses Australia, warns that his members are at constant risk of armed robberies aimed at stealing legal tobacco products for the illegal market. This is not an isolated issue but part of a broader trend that sees businesses and their employees becoming targets of organised crime.
Dr. James Martin, a senior criminologist at Deakin University, describes the government’s approach as “prohibition in all but name,” creating a multi-billion dollar boon for organised crime. He argues that the ongoing series of tax hikes is not only ineffective but exacerbates the problem, turning it into a significant crime issue of the government’s own making.
The Australian Association of Convenience Stores’ Theo Foukkare also criticises the price hike as a “tax grab,” arguing that it fuels illegal trade and exacerbates crime rather than curbing smoking.
With the cost of a pack of 20 Marlboro cigarettes nearing $60 and illicit packs available for as little as $15, the disparity is likely to drive more smokers to the black market. The federal government’s own revenue forecasts have had to be revised downwards, from $15 billion to $10 billion, illustrating the failure of this punitive approach to address smoking rates.
The escalation in cigarette prices might be well-intentioned, aimed at reducing smoking, but it has paradoxically fostered a thriving illegal tobacco market, replete with violence and criminal enterprise. As the black market grows, so does the associated crime, endangering lives and undermining public safety.
The current strategy seems not only misguided but dangerous, further entrenching a problem that’s spiralling out of control.
