Illegal tobacco sales and cheap cigarettes hurting small business

cigarette Between the big grocery suppliers and illegal tobacco sellers, small, legitimate cigarette and tobacco outlets, such as corner shops and convenience stores, are feeling the pinch. Following the release of a report* by Deloitt that reveals the illicit tobacco market has more than doubled over the past four years, the Australian Association of Convenience Stores (AACS) is calling for an immediate review of the regulations surrounding the sale of tobacco in Australia.

“The illicit tobacco market now makes up 15.9% of the legal tobacco market in Australia and is estimated to cost the Australian government $1.126 billion in lost revenue annually,” said AACS Executive Director Sheryle Moon. “Government policy aimed at reducing the number of smokers in our community is having some success, but our research highlights that while tobacco sales have dropped by 10% in convenience stories, tobacco sales have increased by 8.5% in major grocery stores and there is no question that the illegal trade is growing.

“There is no point taking business away from legitimate small business owners if you’re simply going to hand market share to the major grocery chains and the illicit market and lose tax revenue as a consequence. It’s not fair to expect small business owners to bear the brunt of ill-considered policy decisions in this regard.

”The gap between the supermarket chains and small business sector effectively widens on the back of admirably intentioned yet ill considered policy,” Ms Moon said.

Till now, recognising the community benefit, small business owners and operators in Australia have supported increasing regulation around the sale of tobacco and have been reinventing their business models to compensate for the loss of income. Now they want a fair go in relation to big businesses such as supermarkets in light of the growing illegal trade of tobacco.


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