Illicit Tobacco Market is Costing Government $2 billion Annually

As states a recent report, the number of counterfeit tobacco products in Australia has increased in the past six months, with one in every 12 cigarettes being sold as a counterfeit.
The given raise comes ahead of federal government plans for plain packaging and if proper could cost the government more than $2 billion in lost excise annually.

A report released by Deloitte, stated that illicit market for counterfeit tobacco products that imitate original brands has gone from 4 to 8 % of all sales within a half a year and loose tobacco from 5 to 9%.
Last year Deloitte find out that illicit imports cost the government $1.1 billion in lost revenue from taxes, thus demonstrating that loss could increase this year if such situation persists.

British American Tobacco (BAT) representative Scott McIntyre declared that plain packaging would make it simple for criminals to falsify packets. “If all cigarette packages have the same look and even without their logos, crime gangs will be able to produce illicit smokes without any difficulties and sell them on the illegal market. Criminals will continue to produce millions of dollars on account of taxpayers and retailers,” he stated. 
“If plain packaging is implemented and all cigarette packages look the same then even officials will be unable to distinguish legal smokes from illicit ones.”

BAT is against plain packaging of its products. There are no evidences that will prove that plain packs will have some effect. For instance a study revealed that increased sizes of graphic warnings on packages have not reduced smoking rates. Illegal cigarettes already constitute 20% of the tobacco market in UK and plain packaging will simplify the process of counterfeit cigarettes production. It will help to create a flourishing black market and will make tax revenues drop.

Unique packaging would make it harder to stop smuggled and counterfeit tobacco products entering a market, decreasing government tax revenue. The plainer the pack, the easier is way to counterfeit it. According to statistics, black market costs Australia a 1.1 billion a year in lost tax income. “If it becomes necessary, we will do everything in order to protect our brands and our rights to sell legal tobacco products,” declared BAT spokesman.
But Home Affairs Minister Brendan O’Connor has called the research as nonobjective because it was financed by the tobacco companies. “The false claims made by Big Tobacco about the predominance of illicit cigarettes simply don’t have sense. I think that British American Tobacco, Imperial Tobacco and Philip Morris paid for the given research,” M. O’Connor stated.
The National Drug Strategy Household Survey demonstrated a 0.2 % of the population used illicit cigarettes.