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TOBACCO TOUCHING BASE WITH Retail World draws attention to developments in the illegal tobacco trade, the push for e-cigarette approval, and a supplier’s view of recent industry changes. Smokers go for black market savings Australia’s illicit tobacco consumption has reached an “all-time high” and as tobacco excise pushes the cost of cigarettes to record levels, a new report has revealed one in every five cigarettes smoked is an illegal product. According to the annual KPMG report into illicit consumption in Australia, the illicit trade now accounts for around 20.7 per cent of total tobacco consumption, an increase from 14.1 per cent last year. This is supported by the number of undeclared tobacco seizures, which rose to 286,663 in 2018/19, an annual increase of 46 per cent. “Rather than discouraging people from smoking, we believe that multiple tobacco excise increases have sent smokers to the black market in search of cheaper tobacco,” Imperial Brands Australasia Head of Corporate and Legal Affairs Kirsten Daggar-Nickson said. “In its submission to the Parliamentary Joint Committee into Law Enforcement earlier this year, the Australian Border Force said excise increases may impact the size of the illicit tobacco market, as the rising cost of licit tobacco may drive increased demand for cheaper alternatives, including illicit tobacco,” she said. Ms Daggar-Nickson says smoking rates in Australia have remained relatively flat since 2014, despite the world’s toughest tobacco control measures. “There are still around three million smokers in Australia, with official data showing that between 2014-15 and 2017-18 the daily smoking rate remained ‘relatively similar’, only declining from 14.5 per cent to 13.8 per cent,” she said. “Already there are an estimated 227,000 vapers in this country \[Addictive Behaviours, August 2019\] who import smoke-free products such as nicotine-containing e-cigarettes and heated tobacco devices because they’re not legally available in Australia. “Smoke-free products are already available in more than 50 countries around the world. In order to achieve its 10 per cent smoking rate goal, the government should acknowledge that smoke-free alternatives can play a role and have a positive impact on public health in Australia.” Ms Daggar-Nickson says the illicit tobacco trade is supporting the criminal activities of syndicates with links to terrorist groups, instead of funding vital government projects. “The Police Federation of Australia says it’s universally agreed that serious and organised crime is behind the illicit tobacco trade, with investigations suggesting it’s under the control of Asian and Middle Eastern crime gangs, and fears links are being established with South American gangs,” she said. “This is a massive issue which needs JUN, 2020 RETAIL WORLD