The growing tobacco black market

The Herald reports:

An increasing tobacco black market saw the Government miss out on $287.4 million in tax last year, a report reveals. …

But one expert told the Herald the controversial policy of continually hiking up tobacco prices is “feeding organised crime”. …

Customs investigations manager Bruce Berry told the Herald the illicit tobacco trade has seen “the emergence of more organised criminal groups” and a move away from opportunism.

“We’ve also seen more and more crossover with other forms of criminal activity, particularly in the drug environment. We’ve seen the money laundering that goes with all of these illicit ventures … they’re using the same routes as the drug syndicates.”

Again this should be a good lesson learnt. If you increase the price too much, then you turn it into a commodity for organised crime.

Rohan Pike, a former Australian Federal Police officer and founder of the Australian Border Force’s tobacco strike team, said high prices remained the key driver for smugglers in Australia and New Zealand.

“The profit margin is so high and the risk is so low,” he told the Herald. “They don’t care if there’s a policy of seizure, they’re just going to bombard the border.

“The governments created the policy to tax and that’s created the crime environment,” he said. “At the moment all we’re doing is feeding organised crime.”

High tax leads to high crime!