“The illicit tobacco trade is no longer a victimless crime—it is funding organized crime, fueling violence, and costing Australia billions in lost revenue.”

A Coordinated Crackdown: Australia Targets the Illicit Tobacco and Vaping Trade

A coordinated series of legislative and enforcement actions across multiple Australian states and territories is targeting the illicit tobacco and vaping trade, which officials and reports indicate is linked to organized crime, violence, and significant tax revenue losses.

Local Government Action: Fremantle Council

The Fremantle City Council in Western Australia has unanimously approved amendments to its planning laws, requiring future convenience store owners in the city's central business district to submit publicly advertised development applications before opening.

Rationale and Context

The decision follows multiple resident complaints regarding the increasing number of convenience stores in the CBD and allegations that some of these stores sell illicit tobacco and vaping products. The city identified 15 convenience stores in the CBD; one councillor stated awareness of 18.

"Reports of black market cigarette sales exist nationally, linked to rising gang activity and the potential for related criminal acts such as arson."

A report presented to the council noted that while the city did not determine the legality of current sales, reports of black market cigarette sales exist nationally. The report linked this issue to rising gang activity and the potential for related criminal acts, such as arson, reported in Perth and other areas. Previously, convenience stores in certain zones could open without a publicly advertised application if they complied with the local planning scheme.

State Government Actions

Western Australia

The Western Australian state government is developing new legislation to grant authorities the power to close stores engaged in illicit tobacco sales for up to 90 days. The proposed amendments would also increase the maximum penalty for possessing a commercial quantity of illicit tobacco or vaping products to 15 years' imprisonment, with fines of up to $4.2 million for individuals and $21 million for companies.

A taskforce, led by WA Police Superintendent Steve Post, has been formed to enhance enforcement. The state government has allocated $5 million to expand the Tobacco Compliance Unit workforce.

In January 2026, a raid in Bayswater resulted in the largest single seizure of illegal tobacco in Western Australian history: over 3.9 million cigarettes, 3,900 vapes, and 288 kilograms of loose tobacco, with an estimated retail value of $4.5 million.

Three individuals were charged in connection with an alleged plot to attack a tobacco store.

WA Health conducted 904 inspections of tobacconists and convenience stores in 2025, a decrease from 1,527 in 2023 and 1,226 in 2024. Despite fewer inspections, authorities confiscated four times the number of illegal cigarettes and nearly seven times the amount of illegal loose tobacco compared to the previous year.

In Albany, two employees of an illegal tobacco outlet received fines of $1,000 each for selling tobacco without a license and possessing a prescription drug. Police seized 22,000 cigarettes and 89 nicotine vapes from the shop, which was operating under the facade of a lolly shop.

Victoria

Victoria’s tobacco licensing scheme, operated by Tobacco Licensing Victoria (TLV), commenced on February 1, 2026. The scheme requires all tobacco retailers to hold a license. Selling licit tobacco without a license carries fines of up to $170,948 for individuals and over $854,000 for businesses.

In its first month, TLV seized approximately $5 million worth of illicit stock from 49 stores, including over 3.19 million cigarettes. However, an unlicensed shop was observed selling illegal cigarettes on the first day of enforcement less than 100 meters from TLV's headquarters. Initial compliance surveys in suburbs known for illicit sales, such as Reservoir, showed low license take-up rates.

Two law enforcement sources described the scheme's implementation as a failure due to poor planning and lackluster enforcement.

The state government announced new legislation that would grant TLV and Victoria Police the authority to issue immediate 90-day closure orders for non-compliant shops and allow courts to impose permanent closures. The legislation would also empower landlords to terminate leases for businesses involved in illegal sales and impose penalties on building owners who knowingly lease premises to illicit operators.

An estimated 8,000 tobacco retailers operate in Victoria, with around 1,300 identified as selling illicit tobacco. TLV has 14 inspectors. Over the past three years, Victoria has experienced over 150 firebombings, several murders, and numerous shootings linked to the illicit tobacco market.

Tasmania

The Tasmanian government introduced the Public Health Amendment (Prohibited Tobacco and Other Products) Bill 2026 to parliament. The proposed legislation would grant authorities the power to close shops selling illicit tobacco for up to 90 days and impose fines of up to $3.28 million for repeat corporate offenders.

Joint operations resulted in the seizure of 2.1 million cigarettes, over 1,000 kilograms of loose tobacco, and 735 vapes (street value of $3.2 million) prior to the bill's introduction.

Retail groups, including the Australian Association of Convenience Stores, expressed support for the proposed laws. They reported a significant decline in legitimate tobacco sales and called for additional measures, including allowing landlords to terminate leases for tenants involved in selling illicit goods. Public consultation on the draft legislation was open until March 6.

National-Level Response

Commonwealth Legislation and Enforcement

The federal government announced plans to enhance investigators' capabilities, including expanded wiretap and asset seizure powers for targeting illicit tobacco and vape networks. Proposed changes include increasing maximum jail terms for tobacco offences by two to three times and classifying tobacco offences as "serious crimes" to enable asset seizures. New offences for large-volume shipments are also being considered.

AUSTRAC and Financial Intelligence

The Australian Transaction Reports and Analysis Centre (AUSTRAC) requested increased oversight from major banks in November 2023 regarding tobacco and convenience stores with private ATMs and eftpos services. Since then, AUSTRAC has received 337 suspicious matter reports and made 76 referrals to law enforcement. Bank executives reported that over 1,000 customers have been forced out of their banks or recommended for exit following reviews.

Enforcement Statistics and Market Scale

National and state data regarding the illicit tobacco trade includes:

Related Developments

• Counterfeit Packaging: Criminal syndicates are using counterfeit plain packaging, manufactured in China, to disguise illicit tobacco. The Australian Border Force reported seizing an illegal cigarette manufacturing machine and counterfeit packaging in north-western Sydney.
• Northern Territory: The Australian Council on Smoking and Health ranked the Northern Territory as the lowest-performing jurisdiction for its response to illicit tobacco, citing outdated legislation and a lack of enforcement resources.
• Victoria Tobacco Wars: An industry insider stated that underworld figure Kazem "Kaz" Hamad controls the national tobacco market. Hamad was arrested in Iraq in January 2026.
• Violence in Western Australia: Eight stores suspected of selling illegal tobacco in Western Australia were targeted in attacks over a three-month period, including arson and drive-by shootings. The violence spread to the Wheatbelt region, impacting towns such as York and Northam.