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Signs of a stranglehold? Calls for action on tobacco retail

Posted 25 Jun, 2018

Signs of a stranglehold? Calls for action on tobacco retail

Quit is calling for an overhaul of tobacco retail in Australia, after a senate inquiry met in Melbourne on Friday.

The parliamentary inquiry into the operation and effectiveness of the Franchising Code of Conduct, which meets in Melbourne today, includes a submission from a tobacconist franchisee who claims British American Tobacco has been able to control products and price points of a retailer, and even manipulated supply to increase their own profits at the expense of retailers.

Quit Director Dr Sarah White said any issues in the franchise sector are likely to be the tip of the iceberg, and that Big Tobacco could well have a stranglehold over small Aussie retailers. It follows reports from whistleblowers in Canada and New Zealand that small retailers are locked into contracts that benefit the tobacco company and not the retailer.

Dr White said that evidence is mounting that Big Tobacco is exploiting the Australian retail sector in its entirety, through practices like incentivising tobacco sales, and controlling price boards and display cabinets. 

“Retailers have become the key remaining avenue for promotion of new products, discounted products and marketing ploys by big tobacco,” Dr White said.

“There are no laws banning incentive schemes where retailers are rewarded for selling more of a product that will kill two in three of its users. There are no laws banning advertising between tobacco companies and retailers, which then encourage retailers to verbally promote new tobacco products and gimmicks to customers. 

“With none of these restrictions in place, Big Tobacco has plenty of ways to keep smokers hooked on its products.” 

Essential to closing these legal loopholes, is the addition of requirements for tobacco companies to report sales and price data – a requirement already in place in several countries, including New Zealand and the United States.

Dr White said government price increases had shown to be the single-most effective strategy to discourage smoking. 

However, tobacco companies are encouraging smokers to keep smoking by introducing new budget brands of cigarettes, and smaller pouches of roll-your-own tobacco. 

For example, roll-your-own pouches of 30g or less have much lower up-front purchase prices than the 50g pouches that have been traditionally sold. By introducing progressively smaller pouch sizes with each tax increase, tobacco companies have been able to continually make a product available at the same low price point.  These products are also being more prominently displayed on price boards in store to catch customers’ attention. 

“By undermining government taxation policy, tobacco companies can distract smokers from quitting, and keep their own profits rolling in,” Dr White said.

With more than 15,000 Australians dying of tobacco-related causes every year, Dr White urged State and Commonwealth governments to start a complete overhaul of the sector.

“Tobacco retail in Australia needs to be reviewed and comprehensive reforms put in place to stop Big Tobacco undermining tobacco control measures such as plain packaging and tax increases. Lives are literally at stake.”


Quit Victoria is a partnership between VicHealth, the State Government of Victoria, Cancer Council Victoria and the Heart Foundation.

Media release

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