Criminal groups are using illicit tobacco to fund drug trafficking and terrorism as cigarette prices soar, according to the Australian Criminal Intelligence Commission

Soaring cigarette prices in Australia present lucrative opportunities for international organized crime groups that are turning to illicit tobacco as a “low risk, high reward” business.

The Australian Criminal Intelligence Commission (ACIC) says there is growing evidence that organized and serious crime cartels are also using the company as a platform for other illicit activities, including drug imports and terrorism.

The top criminal intelligence agency has issued a stark warning that the price of a regular pack of 25 cigarettes in Australia can sell for upwards of $50 (or $2 a stick), due to tobacco taxes the highest in the world.

“As the cost of legal tobacco products continues to rise due to frequent increases in excise duties, serious and organized criminal groups are seizing the opportunity to make more illicit profits,” the CEO said. ‘ACIC, Mike Phelan, at the ABC.

“The amount of profit organized criminals make on a single container full of cigarettes means they only need one in 30 containers to make a profit.

“Although the profits are not as large as for illicit drugs, the penalties are much lower and the risk-reward ratio is much more favorable to organized crime groups.”

Police discovered nearly 30 tons of illegally grown tobacco plants(Provided: Queensland Police)

More than 264 tons of illicit bulk tobacco (known colloquially as chop-chop) and 540 million cigarettes have been seized and destroyed since the formation of the illicit tobacco task force in 2018, but authorities acknowledge that much of the product is not intercepted.

Since 2016, nicotine consumption has been monitored by ACIC as part of the National Wastewater Drug Monitoring Program, with data suggesting that overall consumption has remained relatively stable in Australia despite increasing taxation of legal products.

“Nicotine consumption was significantly higher in regional areas compared to capital cities throughout the duration of the program and variable between sites,” Phelan said.

“National nicotine consumption fluctuated only within a relatively narrow range during the program.”

Yellow fluffy toy next to illegal tobacco
Police ministers across Australia have agreed to consider “enhanced efforts” to tackle illicit tobacco.(ABC News: Mazoe Ford )

In recent years, industry groups have become increasingly frustrated with the growth of the illicit tobacco market, complaining of an increase in pop-up tobacco shops selling illegal products in full view of legitimate retailers.

In 2020, the Australian Federal Police (AFP) told a federal parliamentary inquiry into illicit tobacco that “profits generated from illicit tobacco fund other criminal activity”.

Last week, AFP Commissioner Reece Kershaw warned that drug cartels and other organized crime groups were also being infiltrated and aided by hostile foreign governments to launder dirty money and sell substances illegal in Australia.

At the last Countering Terrorism and Transnational, Serious and Organized Crime (TSOC) Ministerial Meeting in March, police ministers from across Australia agreed to consider “enhanced efforts” to tackle illicit tobacco.

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