BACKGROUND: Between 2016 and 2021 the estimated value of illicit tobacco products seized in Australia increased from $135 million to $2.09 billion. The estimated size of the illicit tobacco market also tripled to about 15% of the overall Australian market. Criminal gangs have also begun firebombing tobacconists in a turf war for the illicit tobacco marketplace. The Australian illicit tobacco market therefore now presents an urgent and escalating public health and public safety concern.
METHODS: In-depth qualitative interviews were conducted with 12 owners and staff of tobacco retailers regarding the licit and illicit trade of tobacco and vape products. Supplementary interviews were also conducted with police and public health officials working on controlling the illicit trade. Transcripts were analysed using deductive and inductive coding, with overarching ‘themes’ identified and reported.
RESULTS: Tobacconists reported that the last three years have been tumultuous for tobacco retailing due to the emergence of ‘pop-up’ shops selling illicit tobacco and vaping products outside of established franchises, impacting their revenue and leading many to close. The proliferation of these outlets supported by criminal organisations has created an environment where tobacconists are more incentivised to sell illicit products.
CONCLUSIONS: The Australian tobacco market has been impacted by an expansion of the illicit tobacco and vape markets facilitated by organised crime groups. While regulatory reforms (e.g., retail licensing and establishment of a federal commissioner) are being enacted to control this growing illicit market, the situation highlights the lack of preparedness of current tobacco retailers for business disruption. Government planning for a commercial tobacco endgame must consider ways to control the illicit market and how to help retailers transition out of retailing tobacco.