Criminals cashing in as tobacco war reaches the regions

Federal Monash MP Mary Aldred says bikie gangs and terrorists are cashing in on an illicit tobacco trade that has firebombed its way across Melbourne and now reached regional Victoria.

Ms Aldred took aim at the trade on the ABC's 7.30 program, saying it had shifted from shopfronts to the internet.

"It's just taken it from bricks to clicks, really," Ms Aldred said.

"It's moved all of this illegal activity online. You've got bikie gangs, terrorist organisations that are benefiting from the proceeds of these crimes."

The program filmed Ms Aldred outside her Warragul electorate office, next to a tobacco store caught up in the illegal trade.

Asked if she was surprised the tobacco wars had reached Warragul, Ms Aldred said no town was immune.

"I think it's something that every regional town is grappling with," she said.

"It's been a terrible ordeal for the businesses either side of this shop, who have got nothing to do with this."

Authorities concede they are struggling to contain the trade.

Head of the Victorian Arson Squad Detective Inspector Chris Murray told the program there had been 193 tobacco arsons and six homicides linked directly to the trade.

"We've made over 500 arrests for the tobacco arsons," Det Insp Murray said.

"But I've got to be honest with you, I'm not sure that it's made a difference, which is sad. So it's not through lack of trying."

Figures cited on the program showed 80 per cent of all nicotine consumed in Australia last year came from illicit sources, with consumption up almost 40 per cent since 2017.

Ms Aldred has long blamed the tobacco excise for driving the black market and used the program to renew her call for it to be cut.

"They're not prepared to, I don't think, have an honest conversation about the role that the high excise is having in driving this black market," she said.

New South Wales Premier Chris Minns has also said the excise is too high.

Federal Illicit Tobacco and E-cigarette Commissioner Amber Shuhyta said the excise was only part of the problem, pointing to the profits on offer to organised crime.

She said the real fix was tougher enforcement.

"We do need to see more store closures," Ms Shuhyta said.

"We need to see more consequences and penalties."

The Australian Border Force seized more than 2100 tonnes of illicit tobacco and more than six million vapes in 2024-25.

Former Border Force Commissioner Michael Outram, who ran the agency until 2024, said the profits were staggering and estimated only about 1 per cent of shipping containers were being X-rayed.

But Ms Shuhyta defended the agency, saying it had lifted seizures in the past year and could not scan every container without stopping the economy.

"The ABF is doing a realistic job in terms of targeting where there is risk so that they get the biggest impact," Ms Shuhyta said.