Finally, the government starts its crackdown on illicit tobacco

THE State Government is finally moving to crack down on illicit tobacco sales.

Tobacco retailers and wholesalers are this week being encouraged to apply for a tobacco licence, less than two weeks out from a campaign of enforcement designed to hit the illicit tobacco trade and organised crime which has infected every town in the state.

Enforcement, says the state government, will be supported by close co-operation between the regulator, Victoria Police and other authorities to stamp out the illegal tobacco trade.

Whether local councils will have a role to play, and if so, how they cover the cost of increased monitoring and enforcement, is not known.

The Sentinel-Times has asked the Minister for Casion, Gaming and Liquor Regulation Enver Erdogan and local councils to clarify.

On Friday, January 30, the Minister's office replied by sending a copy of his media statement earlier in the morning, noting that no mention was made of any role for Local Government in the enforcement effort.

"Thank you all for joining me this morning. Today marks an important milestone for our state. It's the beginning of enforcement for our new tobacco licensing scheme. I'm joined today in this announcement by our inaugural Chief Operating Officer, Bree Oliver, thank you, Bree.

"Today is about making sure we keep communities safe, that we provide support for our legal tobacco market, but also crack down on the criminal elements that are taking advantage of this illicit trade. As a state, we've taken important measures over the last 12 months focused on making sure there are tough new penalties, including up to 15 years' imprisonment for people that are involved in the illicit trade, penalties of up to $1.8 million for businesses doing the wrong thing, and most importantly, setting up a framework for a legal sector that's never happened before.

"To date, over 4000 businesses have made applications to our new tobacco licensing scheme. I'm expecting that to grow as we can come towards the closure of that initial application period. So, if you're watching, please sign up by the first of February. So, you have one more day before you can sign up, and during that period, you'll be able to legally trade.

"The focus of our new license and scheme is to make sure that there is a legal operating framework where there's compliance with the law, state and federal laws. Understanding that this is a national issue that requires a national approach, we've made sure that our laws are as consistent as possible with other jurisdictions, and we're working closely with Victoria Police, and we've seen in Victoria alone, over 150 arrests have been made in relation to the illicit trade over the last couple of years.

"We'll continue to do that work with new intelligence gathering and a laser focus by the regulator, and we're hopeful that today is an important day that will make a big difference to the growth of this sector."

It’s not cheap, nor should it be.

An application for a licence submitted before June 30, 2026 (valid until 30 June 2027) will cost $1,175.20

Applications for an annual licence submitted after June 30, will cost $829.60

Minister for Casino, Gaming and Liquor Regulation Enver Erdogan said businesses must lodge their applications before January 31, 2026, ahead of licences becoming mandatory from February 1, 2026.

“Victoria is working to smoke out illicit tobacco operators, with tough penalties for anyone selling illicit tobacco or selling tobacco without a licence from February.”

“As the deadline approaches, we’re urging every legitimate business that sells legal tobacco to apply now, so we can continue our strong crackdown on illegal tobacco and the criminal activity that sits behind it.”

 Thousands of applications

More than 3300 applications have already been received by Tobacco Licensing Victoria since the scheme commenced on July 1, with more expected ahead of the deadline.

Anyone who sells tobacco in Victoria will need to apply for a licence if they have not already done so, including supermarkets, convenience stores, liquor stores, petrol stations and online retailers.

Businesses that apply before 1 February can continue to trade while their application is assessed. Anyone who applies on or after 1 February must wait until they are granted a licence before selling tobacco.

From February 1, licensing inspectors will be on the ground to ensure businesses are complying with their obligations and act against those who break the law.

 Huge penalties apply

The biggest deterrents are our tough new penalties as anyone found selling tobacco without a licence faces fines of up to $170,948.40 or up to five years in jail – while businesses face fines of more than $854,000.

Anyone caught selling illicit tobacco faces fines of up to $366,318 or up to 15 years in jail, with businesses risking penalties of more than $1.8 million.

Licences will only be granted to fit and proper people who pass a strict test, with the regulator able to refuse a licence based on a person’s history or known associates.

Tobacco Licensing Victoria will have strong new enforcement powers – including suspending or cancelling licences, seizing illegal tobacco products, and court action. They’ll be working closely with Victoria Police to support intelligence‑gathering efforts targeting serious and organised crime.

The Victorian Budget 2025/26 delivered $46 million to establish the new licensing scheme and regulator and help smoke out the illegal tobacco market.

For more information and to apply for a licence through Service Victoria click HERE.

Get a license or quit, they say

Cancer Council Victoria and Quit have also weighed in with a statement, welcoming the enforcement effort and urging retailers and wholesalers to get a licence or get out of the industry.

They said that from Sunday, February 1, any individual, retail or wholesale business found selling tobacco products without a licence could face hefty fines of up to $1.8M or up to15 years’ jail time, as Tobacco Licensing Victoria rolls out enforcement.

"Quit welcomes the introduction of the much-anticipated step in tighter tobacco control but remains concerned about the size of the scheme in relation to scale of the problem.

"In Victoria, approximately 8,000 to 10,000 businesses sell tobacco products, while just 14 licence inspectors will be employed. National estimates suggest up to 55% of Australian tobacco sales are illicit representing a market value of $5.6 billion nationally."

Rachael Andersen, Quit Director, flagged specific problems with the powers held by Tobacco Licensing Victoria inspectors.

“At Quit we’ve been calling for Victorian tobacco licensing for years. So, we’re pleased to see this crucial step forward. However, we have reservations about the limited powers of Victorian licensing inspectors, and the size of their workforce, with just 14 inspectors for the whole state.

"Under the Victorian scheme inspectors will be unable to close shops found selling illicit tobacco nor can they act against stores selling illegal vaping products.

“While this scheme sets the foundation for action on tobacco, it needs to be backed up with more power and more inspectors to better protect Victorians from the harms of tobacco,” Ms Andersen said.

Todd Harper AM, CEO Cancer Council Victoria, recognised the government’s willingness to act on tobacco and called out the sheer scale of harm caused by its use.

“We welcome a specialised tobacco licence enforcement workforce and scaled up severity of fines and jail time to act as deterrents for retailers considering doing the wrong thing.

“With enforcement about to get underway, we look forward to seeing benefits to the Victorian community as fewer retailers sell harmful, cheap, illicit tobacco. I remain hopeful that key improvements to the scheme can be made, and soon. We know smoking-caused illness still kills 66 Australians a day, and that’s simply too many lives lost to preventable death,” Mr Harper said.

Increasingly Quit, alongside the broader public health community, is planning for a future where tobacco sales are further restricted. Afterall, most people who smoke or vape have a desire to quit.

“We need to get serious about supporting people to quit harmful nicotine products like cigarettes and non-therapeutic vapes, and the best thing we can do is have fewer shops selling these products. Licensing will help us with this ambitious, life-saving challenge. Now it’s time to put the resources behind it,” Ms Andersen concluded.