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MEDIA RELEASE
11 May 2015
PHILIP MORRIS LIMITED WELCOMES
SEIZURE OF ALLEGED ILLEGAL TOBACCO IN UNDERA
MELBOURNE, Australia – Philip Morris Limited today welcomed reports that law enforcement authorities
had uncovered an alleged illegal tobacco crop in the Victorian town of Undera.
It is the second discovery of a tobacco crop in the region in just two months, with a 32 hectare crop in
Merrigum seized in March during a joint operation between the Australian Taxation Office, Australian
Federal Police and Victoria Police.
Philip Morris Managing Director John Gledhill said the black market in tobacco was booming in Australia
and had reached record levels as government taxes pushed the price of legal tobacco products higher.
“Smuggling and selling illegal tobacco is a serious crime and we’re pleased to see authorities increasing
their efforts to stamp out the tobacco black market,” Mr Gledhill said.
A study of the tobacco black market by KPMG released this month reveals the tobacco black market has
grown by nearly 30% in two years and in 2014 accounted for 14.5% of total consumption. Had that tobacco
been sold legally, KPMG estimates the Australian Government would have received an additional $1.35
billion in tobacco excise revenue last year.
KPMG found the growth in the tobacco black market was driven by a massive increase in consumption of
‘chop chop’, which grew by 43% last year and now accounts for 54% of total illicit consumption. ‘Chop
chop’ is most commonly sold as finely cut loose leaf tobacco in 250 gram to half kilogram amounts or in
boxes of 100 pre-rolled tubes with no labelling or health warnings.
“The growing price disparity between legal and illegal tobacco caused by excessive tobacco tax increases
makes Australia a lucrative target for organised crime gangs growing and selling cheap, illegal tobacco,” Mr
Gledhill said.
“This illicit trade in tobacco not only enriches organised criminal groups, but also hurts law abiding retailers
and diminishes government revenues.
“Philip Morris will continue to work with various enforcement authorities to share information and
enhance the crackdown on this criminal activity.
“But as the tobacco black market continues to grow in Australia, the government needs to direct further
resources into combatting this crime and reassess the tax and regulatory measures which have created the
environment for this insidious trade.”
Media Contact: Simon Dowding, Manager Communications (03) 8531 1054
Philip Morris Limited
ABN 65 004 694 428
252 Chesterville Road

Moorabbin Vic 3189

AUSTRALIA

TELEPHONE: +61 (3) 8531 1000
www.philipmorrisinternational.com

TELEFAX: +61 (3) 8531 1955