Covert operations in Sydney and Wollongong have uncovered illegally counterfeited cigarettes in the olive green plain packaging format, following a tip-off from a retailer. Each year British American Tobacco Australia (BATA) conducts over 3,000 covert operations however this is the first time counterfeits in ‘plain packaging’ have been uncovered.
Several of the packs have been sent to British American Tobacco’s testing laboratory in Southampton, England, where – according to British American Tobacco Australia (BATA) spokesperson Scott McIntyre – forensic analysis shows that these packs were made by hand, not a cigarette packing machine with the most likely country of origin being China. “Counterfeit packs in Asia are often made by hand in small underground manufacturing bunkers which can produce huge amounts of custom illegal cigarette packs,” Mr McIntyre said.
Mr McIntyre was not able to provide C&I WEEK with comment on the hygiene standards in which counterfeit cigarettes are produced (recent cases of Hepatitis A have been linked to the production of raspberries in China), but he pointed out that these illegal manufacturers “obviously don’t comply with all the health and safety standards that the tobacco industry does here in Australia”.
It’s believed the counterfeit packs were smuggled into Australia by criminals as a test run to gauge interest in the new product from the market. They were sold for $10 to $12 with some of the counterfeit packs hidden amongst legal brands in an effort to conceal them. The actual brand which has been copied is being sold legally for $25 to $30.
“Apart from being smuggled into the country by an organised crime group to avoid paying tax to the Australian Government, there are many issues with the counterfeit packs which don’t make them compliant with plain packaging laws. The olive green pack colour is a much darker shade than allowable, the font type, size and design are also incorrect. The cigarettes are not ‘Australian Fire Risk Standard Compliant’ while the trademark on the side claims the packs are made in England. The smugglers have also counterfeited a cigarette brand which is only sold in packs of 25 in Australia and in two brand variants. The counterfeit packs contain 20 cigarettes and they don’t have a brand variant printed on them,” Mr McIntyre said.
According to Mr McIntyre, since plain packaging was introduced the illegal tobacco black market has grown 25% with a large surge of colourful branded packs and more than 14.3% of all tobacco consumed in Australia during 2014 was illegal and smuggled into the country with a consequent loss of $1.1 billion in government revenue.
“We now have illegal branded packs, counterfeit plain packs and large amounts of chop chop being sold on the black market across Australia. What’s concerning is that the former government introduced fines of over $300,000 for retailers found selling non plain packaging compliant tobacco and yet the Health Department’s last annual report shows that they’ve not made one prosecution.
“The enforcement agencies do a good job but they obviously need more resources to try to stop the flood of illegal tobacco being smuggled across the borders while the Health Department needs to start enforcing its own laws at a retailer level.”