Melbourne’s escalating tobacco wars have sparked renewed calls to slash Australia’s tobacco excise, with retailers arguing soaring cigarette prices are fuelling organised crime, violence, and a booming black market.
The Australian Association of Convenience Stores is backing calls from the New South Wales Premier, Chris Minns, to reduce tobacco excise by 50 per cent, which would lower the price of a legal packet of cigarettes to about $25, compared to roughly $15 for illegal products sold on the black market.
Theo Foukkare, Chief Executive of the Australian Association of Convenience Stores, said excessive tobacco taxes had created a thriving underground economy controlled by violent criminal syndicates.
“What we have in the tobacco excise is clearly a failure,” Foukkare said. “What was initially well-intended and was delivering good results in driving smoking down is actually having the reverse effect now.”
Foukkare said retailers had lost more than $2.5 billion over the past five years, including $750 million in 2025 alone, as black market tobacco and vape sales surged.
“Our members have lost $750 million alone in the 2025 year,” he said. “What that’s caused is this illegal black market where the only means that these people know how to operate is to intimidate, to use violence, to use threats.”
The comments come amid Melbourne’s ongoing tobacco wars, which have seen firebombings, armed robberies, and extortion attacks linked to organised crime groups battling for control of the illicit cigarette trade.
Foukkare said legitimate retailers were increasingly being targeted by criminals demanding protection money or stealing legal tobacco products to resell illegally.
“We’ve had retailers that have been held up in broad daylight when customers and staff are in the store, I’m talking at 5pm, so that they can steal legal tobacco products to onsell to the illegal market,” he said.
“Retail members have been stood over and threatened to pay protection money or have their stores burnt down. For us, our people are our biggest asset. And we need to make sure every day that they’re going to get home because they’re just working to earn a living.”
Foukkare also said Australia’s prescription-only vape model had failed, pointing to government data showing almost 96 per cent of nicotine vapes are now supplied by organised crime groups.
“Very, very few people are going to pharmacies,” he said. “What we’ve been calling for is for a proper regulated retail model with all of the restrictions in place, the same as tobacco.”
He warned organised crime syndicates were now profiting massively from illegal tobacco, vape and counterfeit alcohol sales. “Crime groups are not only making billions but are also effectively running tobacco and nicotine vaping policy in Australia.”
The push comes as potentially lethal amounts of dangerous chemicals and plastics were discovered in bootleg alcohol being sold in Melbourne stores, in what retailers say is the latest sign organised crime groups are expanding their illegal operations.
