Illicit tobacco can be defined as ‘any tobacco on which legally required duties and taxes have not been paid’. This includes illicit tobacco (processed or unprocessed) or tobacco products (either manufactured tobacco or cigarettes) produced locally or smuggled from over borders. It also includes products that are:
- produced by registered trademark holders but diverted from legal market
- counterfeited or
- produced specifically for the illicit market (often referred to as ‘cheap whites’ or ‘illicit whites’).
The Australian Government has not regarded illicit tobacco as a major problem to date. The majority of seizures of smuggled tobacco at ports over the past 10 years have been for raw, unbranded loose tobacco known locally as chop-chop. The most recent government-funded survey found that 1.4% of smokers in 2010 used unbranded tobacco ‘half the time or more’. Illicit branded cigarettes (counterfeit and other contraband cigarettes smuggled into the country without payment of customs duty) have also been noted in Customs seizures since 2001, but in much smaller quantities than unbranded loose tobacco.
The tobacco industry has funded a number of reports with claims about the size of illicit tobacco trade in Australia. Critiques of these reports have highlighted numerous flaws in their methodology and show that tobacco industry figures for illicit tobacco contained in the reports are highly inflated compared to government figures on illicit tobacco use in Australia. Copies of these critiques and links to the original reports can be found on the Plain Facts website.
For further information, on illicit trade, see the following sections from Tobacco in Australia: Facts & Issues: