The Cancer Council has slammed a report backed by big tobacco showing that illegal trade in the addictive substance has increased since plain packaging laws were introduced.
The KPMG report, commissioned by British American Tobacco Australia, Philip Morris International and Imperial Tobacco Australia, says tobacco smugglers are costing taxpayers more than $1 billion a year.
It says the illegal tobacco market now comprises 13.3 per cent of total domestic tobacco consumption.
Australia’s world-first plain packaging laws came into effect in December 2012, removing all logos, colour and design from cigarette packets.
Cancer Council Australia says the report is part of big tobacco’s push to unwind those laws.
“The tobacco industry would do anything to stop plain packaging, especially after recent Australian research showed the plain packs were a turn-off to smokers,” the council’s director of advocacy, Paul Grogan, said in a statement.
“The best way to eliminate illicit tobacco trade is to keep reducing the number of smokers, with good public health policy.”
The last thing multinational tobacco companies like British American Tobacco wanted to see was fewer smokers, Mr Grogan said,
“That’s why the tobacco industry always talks up the level of illicit trade when it suits their commercial interests.”
But British American Tobacco Australia’s Scott McIntyre said smugglers were benefiting from inadequate enforcement of plain packaging laws.
He said “dodgy retailers” were selling illegally branded cigarettes across the country, most of which were imported from Asia and the Middle East.
“They (retailers) appear to have no fear of getting caught because the plain packaging laws are not being enforced at a retailer level,” Mr McIntyre said.
He said smugglers were also being boosted by excise increases on legal tobacco.
“Escalating the excise rate by 50 per cent over the next few years will see gangsters stacking more cash than ever while in turn slugging smokers in the hip pocket,” he said.
Opposition health spokeswoman Catherine King praised efforts to reduce smoking.
“Australia’s low smoking rate is the result of sustained, concerted and comprehensive public policy efforts,” she said.
Customs and Border Protection is being sought for comment.