Latest figures from a new report prepared for British American Tobacco Australia, Imperial Tobacco Australia, and Philip Morris Limited have revealed that Australia’s Federal Government is missing out on $1.42 billion due to illicit cigarettes and chop chop – untaxed, illegal, loose tobacco – as almost 15% of all tobacco consumed in Australia is now sold on the black market.
Chop chop makes up 65% of all illegal tobacco consumed in Australia, sold as finely-cut loose leaf tobacco or in boxes of 100 pre-filled tubes with no labelling or health warnings.
In mid-October 2015 the Australian Border Force (ABF) formed a strike team against the tobacco black market. Since then it has seized millions of dollars’ worth of the contraband. On October 18, ABF officers in Melbourne targeted a container from Singapore said to contain masking tape, but which actually contained 10.6 million cigarettes which would have attracted $5.6 million in duty if imported legally.
In November the tobacco strike team also seized two consignments of molasses tobacco totaling seven tons. One consignment was wrongly declared as herbal molasses, which doesn’t attract duty, and the other was consigned to a fake company. These goods would have attracted $4.7 million in duty if imported legally. However, despite the ABF strike team’s efforts, illegal cigarettes and chop chop are still easily accessible.
The Herald Sun reported BAT Australia spokesperson Scott McIntyre as saying, “The growth in illegal tobacco is directly linked to the federal government’s annual 12.5 % excise increases. These large excise increases and other excessive regulations fuel the black market and make it more lucrative for organized criminals to smuggle illegal tobacco into Australia. Hopefully, the ABF strike team can help stamp out the illegal tobacco problem as it comes across the border. However, more resources need to be deployed at the retail level for enforcement.”