The Australasian Association of Convenience Stores has warned tobacco ‘tax hikes’ are behind the rise in illegal trade.

Issuing a statement yesterday, AACS CEO Jeff Rogut said the price discrepancy between legal and black market products was making the latter more incentive to consumers.

Citing the latest Illicit Tobacco in Australia report (complied by KPMG), Mr Rogut said the illicit tobacco trade cost the Australian government $3.4 billion in lost tax revenue and added one in five cigarettes consumed was sourced from the black market.

The report found illicit trade accounts for more 20% of Australia’s tobacco consumption, up from 14% in the previous report.

“Legal tobacco is subject to regular, excessive excise increases that drive consumers, many of whom are in lower socio-economic brackets, to the illegal market. There is clear evidence of this and the latest illicit tobacco figures emphasise how widespread this crime as become,” Mr Rogut said.

“Criminals are supplying illegal cigarettes to communities across the country in massive numbers, to people of any age, and through some dodgy retailers who are completely aware that they are engaging in a criminal activity, yet continue to act with impunity.”

Mr Rogut has called for a moratorium on excise increases on legal tobacco, saying the existing approach was ‘counterproductive’ and hurting law abiding businesses.

C&I has reported on several recent and significant seizures of illicit tobacco crops.

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