Federal Member for Gippsland Darren Chester says this week’s closure of 15 suspected illicit tobacco stores in Gippsland highlights the scale of Australia’s illegal tobacco trade and the need to attack the profits flowing to organised crime.
Victoria Police and Tobacco Licensing Victoria closed stores in Yarram, Moe, and Newborough under new powers allowing suspected illicit tobacco premises to be shut for 90 days.
Mr Chester said the closures came as the Albanese Government voted against a Coalition amendment in Federal Parliament that sought to cut tobacco excise by 80 per cent as part of a broader strategy to undermine the black market.
“Smoking cigarettes and vapes is bad for the individual, but outsourcing the tobacco industry to organised crime is bad for society,” Mr Chester said.
“We should continue supporting sensible public health measures to reduce smoking rates, but we also need to recognise that the current settings have created an extraordinarily lucrative black market.
“This week we have seen suspected illicit tobacco stores closed right here in Gippsland. That demonstrates this isn’t some distant problem confined to Melbourne; the illegal trade is operating in our own communities.”
The Australian Bureau of Statistics estimated earlier this year that around 80 per cent of tobacco and nicotine products consumed in Australia in 2025 were illicit, while the Parliamentary Budget Office has highlighted the sharp decline in tobacco excise revenue as consumption has shifted towards the illegal market.
Mr Chester said the Coalition supported stronger enforcement measures but did not believe policing alone would be enough to dismantle the criminal trade.
“The huge price gap between legal and illegal cigarettes has created an enormous profit margin for organised crime,” Mr Chester said.
“When criminals can massively undercut legitimate retailers, rivers of cash will continue flowing into criminal networks.
“That’s why the Coalition has proposed cutting tobacco excise by 80 per cent, to dramatically narrow that price gap and take customers and profits away from the black market.”
The Coalition’s policy would reduce the excise component on a standard packet of 20 cigarettes from around $30 to around $6, with the rate reviewed after two years. It would be backed by a $200 million nationwide law-enforcement surge targeting illegal shops, border seizures, supply chains and the criminal networks profiting from illicit tobacco.
Independent Parliamentary Budget Office modelling commissioned by the Coalition estimates its broader tobacco and nicotine policy package, including the excise reduction, would improve the Federal Budget balance by around $8 billion over the first four years as more sales return to the legal market.
“The Government had the opportunity in Parliament to support a different approach and voted against our amendment,” Mr Chester said.
“I don’t accept that enforcement alone is enough.
“Closing illegal stores, seizing illicit products and prosecuting criminals are all important, and the Coalition supports stronger powers for law-enforcement agencies.
“But unless we also attack the business model that makes illicit tobacco so profitable, organised crime will continue to have an enormous financial incentive to stay in the market.”
