Illicit tobacco trade

The trade in illegal tobacco products damages our industry, funds criminal activity, undermines tobacco control measures and hurts the business of honest retailers whilst depriving the Australian government of nearly $3.5 billion in tax revenue.

Illegal cigarettes: Who pays the price?

Tobacco is one of the most extensively smuggled legal substances in the world, funding an underworld of organised crime.

The latest figures from the KPMG LLP “Illicit Tobacco in Australia” Report show that 20.7% of all tobacco consumed in Australia is illicit. 

That means $3.4 billion in lost taxes to the Government had that tobacco been consumed legally .

2019 Full Year Report – Illicit Tobacco in Australia (7,730 kb) 

This is Government revenue that has gone into the hands of criminals instead of important public services like roads and schools.

Serious and organised crime is involved in the illicit tobacco trade, and it is the responsibility of law enforcement agencies to enforce the law.

If you see illicit tobacco or come across any information relating to illicit tobacco, note it down and report it;

Call British American Tobacco Australia on 1800 643 562 or notify the Australian Border Force via a simple online form .

We will continue to support the work of the Australian Government in addressing all forms of illicit trade.

To read our media releases and reports into the problem of illegal tobacco in Australia please visit our Media section.

A global problem

Some research indicates that over 480 billion cigarettes a year are sold illegally in the global tobacco market – whether smuggled, counterfeited or sold in other ways without taxes being paid.

The shadowy nature of this trade makes the scale of it hard to estimate, but we have developed research methods to help our companies and governments to understand it better. These include market surveys and analysing packs collected from consumers to estimate the difference between duty-paid shipments and actual consumption.

Cigarettes are among the most commonly traded products on the black market due to high profit margins, relative ease of production and movement and low detection rates and penalties.

What can be done?

We fully support regulators, governments and international organisations such as the World Customs Organization, the World Trade Organization, World Health Organization and European Union in seeking to eliminate all forms of illicit tobacco trade. We would like to see all our markets free of it.

We see it as vitally important that governments establish workable tax regimes and economic policies that do not create conditions that encourage illicit trade, with strong border controls and effective laws to fight the black market.

Our approach to fighting the black market in tobacco includes:

  • Effective internal governance and supply chain security;
  • Gathering commercial information on the illegal trade;
  • Working with authorities to ensure that appropriate enforcement action is taken;
  • Engaging with international bodies like the World Customs Organisation to increase understanding of the issue;
  • Informing regulators about the impacts of the illegal tobacco trade; and
  • Raising awareness of the issue among our employees, business partners and the public.