THE introduction of plain packaging in December will see black market cigarette sales flourish leading to cheaper cigarettes, according to industry heavyweights British American Tobacco Australia (BATA).
BATA spokesperson Scott McIntyre said the cigarette black market would “get worse with plain packaging” for a number of reasons.
“The packs will be easier to copy, because they will all look the same, and they’ll be easier to hide among legal products,” Mr McIntyre said.
“It will mean you can really ramp up the illegal market because people won’t actually know if they’re buying illegal product or not.”
Mr McIntyre said smokers were attracted to black market cigarettes because they were so much cheaper than expensive legal cigarettes with large tax excises attached to the price.
He said the increase in cheap black market cigarette sales would force legal brands to drop their prices to compete, which would lead to cheaper cigarettes across the board.
Mr McIntyre said BATA had warned the government about the issue but said the government was “being very quiet about it”.
“We’ve put it to them [the government] and they’re not acknowledging it’s going to be an issue,” he said.
Mr McIntyre said BATA could prove the cigarette black market trade was currently alive and well because they were using “covert teams of ex-detectives” to monitor illegal sales of cigarettes around Australia.
“We have a covert crew of guys, ex-detectives some of them, who can show you where illegal cigarettes are sold in Australia,” he said.
“You can go out to western Sydney and ask for the cheap Winfield, which is $8.”
Mr McIntyre said the covert teams had bought “lots and lots and lots” of counterfeit versions of the cigarettes BATA manufactures.
But President of the Australian Council on Smoking and Health Mike Daube said tobacco companies were prepared to say anything to discredit new government measures.
“What cigarette companies are saying about plain packaging is unbelievably dishonest and misleading,” Mr Daube said.
“This is the world’s most dishonest industry, so you would expect them to lie about anything.
“The illicit trade in Australia is just tiny and there’s just no way the stuff they talk about is happening,” he said.
But Mr McIntyre said there were many “reports” that had shown the illegal cigarette market was a problem in Australia.
“There’s the Australian Crime Commission, Customs and The Deloitte report into illicit cigarette trade,” he said.
“A whole lot of people are looking into the cigarette black market.
“Deloitte have done a report showing illegal cigarette sales make up about 14 per cent of the market.”
The 2011 Deloitte report, which was commissioned by Australia’s largest three tobacco companies, found 15.7 per cent of Australia’s smokers were illicit tobacco users. And 15.4 per cent of survey respondents acknowledged purchasing unbranded illicit tobacco in 2010, up by 2.4 percentage points from 2009 results.
But Mr Daube said surveys funded by cigarette companies should not be taken seriously.
“They have dreamed up with their colleges and consultants bizarre figures,” he said.
Mr Daube said Australian tobacco companies were feeling pressure from international headquarters to discredit the plain packaging legislation wherever possible.
“It’s the world’s most lethal industry, the world’s most disreputable industry and the world’s most dishonest industry,” he said.
“This garbage about the illicit trade is just desperation talk.”