2GB host Ben Fordham says smokers 'handing money' to criminals amid Australia's growing illicit tobacco market

Sky News AU

3 days ago

A radio host has warned criminals will continue to thrive from the illicit tobacco market, as smokers turn to cheaper alternatives due to the government's high cigarette excise.
The current tobacco excise rate in Australia is approximately $1.40 per stick and $2158.65 per kg of tobacco content, an increase of 2.7 per cent from the previous period.
The average price of a packet of cigarette in 2025 is about $40, but smokers are seeking cheaper, black market options, which can cost just $15 a pack.
2GB host Ben Fordham said smokers were funding the lives of criminals.
"We're just handing money to people," he said.
"We're buying people Lamborghinis and Ferraris and sending them on first-class holidays around the world the rest of their lives. It's a free kick (for the criminals)."
British American Tobacco's chief corporate officer, Kingsley Wheaton, said Australia was in the middle of a "national crisis" which had seen the tobacco war explode in streets, with numerous shops firebombed in an underworld tussle for control of the lucrative market.
Mr Wheaton, who had heard about the boom of the illegal cigarettes from London, was left stunned about what he has seen and heard first-hand while in Sydney.
"At the end of the day, 55 per cent of the market is illicit cigarettes," he said on 2GB.
'That mean that Australia is up there with Malaysia and South Africa as the most illicit markets in the world. It's a big problem because the government is losing revenue."
Mr Wheaton added eight out of 10 consumers of nicotine are being served by criminals.
The issue also expands to vapes, which have sharply grown in popularity in recent years.
Mr Wheaton said the "only winner" from the government's high excise are those in the underworld.
"I believe police and local states are doing a great job, but that's not enough," he said, adding a cut to the tax on cigarettes was the only solution.
"A revision to the 2018 rates, raise more government revenue for the Treasury, reduce the amount of illicit (tobacco) and get the marketplace back into responsibility."
Earlier in June, Treasurer Jim Chalmers said combating illicit tobacco was a 'real challenge', but suggested cutting the excise was not the right move.
'I am not convinced that cutting the excise on cigarettes would mean that would be the end of illegal activity,' he said.
Health Minister Mark Butler recently said lowering prices would not do any good, claiming most countries with lower-priced cigarettes have a "burgeoning black market".
Their opinions differ to their fellow Labor counterpart, New South Wales Premier Chris Minns, who urged the federal government to consider lowering the excise.
"We need to have a look at how big this excise is, how it's driving illegal tobacco sales in our community," Mr Minns said earlier this month.
"And is it the best use of NSW Police time to be devoted to tobacco sales, when in the end the federal government's not getting the excise that they thought — they're not getting that tax that they would get from that massive increase."
Treasury has forecast an almost $7 billion loss for the federal government by 2029 as more people turn to the illegal market for their nicotine addiction.
In March, the government pledged $156.7 million to help law enforcement agencies, such as the Australian Border Force, in hopes of combatting the growing issue.
In September last year, the ABF said it seized more than 45 million illegal cigarettes and 6,500 kilograms of tobacco in five days in Sydney and Melbourne.
Officers detected them in 10 separate sea cargo consignments that were shipped in from China, the United Arab Emirates, Singapore, India and Vietnam.
The total estimate value is more than $75 million.