Home' The Channel Magazine : The Channel July 2016 Contents Australia is one of the most regulated and most expensive
markets in the world when it comes to tobacco.
Starting with the ban on tobacco advertising, followed by
a continual procession of smoking bans in public spaces,
graphic displays on packaging, plain packaging and most
recently, a continuation of punitive tobacco excise increases,
Australian tobacco retailers too have had to deal with a
multitude of restrictions. These include tobacco product
display restrictions, single point of sale, bans on tobacco-
related point of sale materials, price board restrictions and
retail notification or licensing schemes.
Established in 2011, the Alliance of Australian Retailers (AAR)
represents over 3000 individual small business retailers
around Australia. The AAR’s member associations include the
Australian Newsagents’ Federation, the National Independent
Retailers Association and the Tasmanian Small Business
Council. Currently, the AAR is engaged with federal and state
governments, policy makers and parliamentary inquiries on
a range of tobacco-related issues including combating illicit
tobacco, excise increases, and retail licensing restrictions
Consequences of High Tobacco Excise and Illegal
This is one of the most significant issues that affects our
member retailers. Tobacco excise in Australia is now the
highest in the world, encouraging customers to seek
cheaper options, and with more and more of such being
Australian small business retailers simply cannot compete
against criminals who are profiting from the supply of far
cheaper illegal tobacco. Illegal tobacco is high with such
involvement seen as low risk and high profitability. KPMG’s Illicit
Tobacco in Australia report showed illegal tobacco now at 14%
of Australia’s total market consumption. It also showed illegal
tobacco last year cost the Commonwealth Government $1.49
billion in lost revenue from foregone tobacco excise. Worse,
this only strengthens criminal organisations and exposes our
communities to even more risks.
While small business retailers like newsagents operate
within a highly regulated market selling legal, highly taxed,
plain packaged tobacco products from behind closed doors,
there have been others who are deliberately breaking
numerous laws on a daily basis. Legitimate retailers do the
right thing—they do not sell cheaper illegal cigarettes, they
pay taxes and they comply with all laws. Yet every time illegal
tobacco is distributed and sold, legitimate small business
Through the Federal Government’s Illicit Tobacco Industry
Advisory Group, the AAR is engaged with the Department of
Immigration and Border Protection, the Treasury Department,
the Department of Health and the Australian Crime
Commission, among others, to combat illegal tobacco.
More Retail Licensing and Restrictions?
Although tobacco licensing does not exist across Australia,
it is worth noting that the NSW Government commissioned
a taskforce in late 2013 which concluded that despite their
existing Tobacco Retailer Notification Scheme, they did
not recommend the introduction of any licensing fees, nor
the regulation of licences of existing and future legitimate
Notwithstanding, the AAR continues to be concerned
that there are governments and parliamentarians who still
contemplate more ways to introduce or increase
tobacco-related licence fees. This only creates more cost
and red tape burdens for small business retailers, and
disadvantages small business retailers like newsagents
against larger retailer chains and supermarkets. Ironically,
there has been no study in the world that demonstrates such
retail restrictions produce consistent downward impacts on
overall smoking consumptions.
More anti-tobacco proposals to come?
Proposals by governments to consider reduction and
demography-based licence restrictions for existing tobacco
licencees concern the AAR. Both have the effect of taking
away customers and weakening businesses. Moreover,
such governments have yet to explain how existing legal
businesses would be compensated for their losses.
Another state government is considering increasing the
minimum age of customers that can purchase tobacco
products to either 21 or 25 years old. The risk is that this
will not reduce smoking consumption, but instead expose
legitimate retailers to lose sales to interstate, online and illegal
channels. Legitimate retailers already do not sell tobacco
products to anyone under the age of 18. And rightly so.
But this proposal conflicts with Australians’ understanding
of being an adult; that at 18, one can vote, can fight for
Australia, can choose to drink alcohol and have the right to
make their own choices.
The AAR continues to actively engage with governments and
politicians who consider and propose anti-smoking policies
and laws that are not evidence-based and negatively affect
small business retailers.
Words: Chiang Lim, General Manager – Australian
Alliance of Retailers
Current and future trends.
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