Australian state cracks down on illegal tobacco shops as nicotine use surges

SYDNEY, June 4 (Reuters) – The Australian state of Victoria on Thursday introduced laws to give authorities more powers to shut down businesses selling illegal tobacco, as new data showed nicotine use has surged across the country.

Australia charges a federal tax of about A$1.50 ($1.07) on each individual cigarette to discourage smoking. As a result, a pack of cigarettes can cost more than A$60, with high prices blamed in part for fuelling a rise in illegal tobacco products.

The Victorian government said the new laws, if passed, would allow police and the state’s tobacco licensing regulator to issue closure notices and seek court orders to shut businesses for longer periods.

Businesses that fail to comply with the orders could face fines exceeding A$2.4 million and up to 20 years of jail time.

“If you are selling illicit tobacco in Victoria, we are closing the door on your business,” said Enver Erdogan, the minister for casino, gaming and liquor regulation.

“The illicit tobacco trade puts Victorians in harm’s way. It funds organised crime and requires a coordinated effort across borders to stamp it out.”    

The legislation comes as data from the Australian Bureau of Statistics (ABS) released on Wednesday showed the amount of nicotine consumed around the country rose by 40% between 2017 and 2025, far outpacing a population growth rate of 14%.

The ABS said the increase was driven by the rising use of illegal tobacco as well as e-cigarettes. It estimated 80% of the cigarettes and other nicotine products consumed by Australians last year were from the black market.        

The bureau found prices of illegal tobacco products have remained relatively constant since December 2016 while prices for the more expensive legal products have almost tripled due to annual tobacco excise increases.

($1 = 1.4027 Australian dollars)

(Reporting by Christine Chen in Sydney; Editing by Lincoln Feast.)