The Australasian Association of Convenience Stores (AACS) has warned that the Government’s latest legal tobacco tax hike will only lead to bolstering Australia’s illegal cigarette trade while consumers and retailers bear the brunt.
The 12.5% tax increase is the seventh consecutive annual tax hike and reinforces Australia’s position as one of the world’s most expensive markets to buy legal tobacco.
“It’s no surprise, then, that Australia is also one of the world’s most lucrative markets for tobacco smugglers,” said AACS CEO Jeff Rogut.
“This is a case of Government greed unaccompanied by any real effort to crack down on smoking rates,” Rogut said.
“All these endless tax increases do is raise the cost of living, particularly for people in low socio-economic demographics, and expand the illicit tobacco market for criminals to fill.
“From a total tobacco consumption perspective, nothing changes,” argues Rogut. “The contribution of legal tobacco to sales remains consistent, though operators must deal with increased frustration from customers upset about the significant cost increase, as well as the potential loss of customers to criminal sources.”
Rogut said that while the number of smokers is in natural decline tax hikes have had no discernible impact – as a policy, taxation is not working.
“Instead, consumers of legal tobacco are simply having to pay more or turn to the black market. As a nation, we do not even offer these people a safer option in e-cigarettes as Government continues to trail the international movement to regulating the sale of these products,” he said.
The AACS has repeatedly called upon the Government to stop increasing the tax on tobacco and regulate the legal sale of e-cigarette products, to make these products more easily accessible for people looking to quit.
Rogut said that an e-cigarette framework should include restrictions on sales to minors, mandatory quality control standards, anti-tampering packaging and an ingredients list.
“Given the international growth in e-cigarettes and their potential to help people quit traditional smoking, Australia urgently needs guidelines to govern their legal sale,” Rogut said.