Smokers in Australia ‘turning to illegal packets’

In a report commissioned by the tobacco industry, KPMG found that, from July 2012 to June 2013, the total consumption of tobacco appeared to be stable, while the level of illegal consumption of tobacco reached record levels.

The report estimates that Australia missed out on the equivalent of £530m of tax as smokers turned to the illegal trade.

Eoin Dardis, director of corporate affairs for Philip Morris, which makes Marlboro, said: “The hard data coming out of Australia show that people are smoking just as many cigarettes with plain packs as they did with branded packs, do not appear to be quitting and are downtrading to black market tobacco, driving an increase in illegal trade and organised crime.”

The UK Government recently appointed Cyril Chantler, a respected paediatrician who was knighted for services to medicine, to examine whether plain cigarette packaging would reduce the human and financial cost of smoking.

The review will report next month.

The decision was welcomed by cancer research charities, but was unexpected as Prime Minister David Cameron had in July appeared to shelve plans to force tobacco companies to sell cigarettes in plain packaging.

KPMG’s report found that in the 12 months to the end of June 2013, the level of illicit tobacco consumption grew from 11.8 per cent to 13.3 per cent of total consumption in Australia.

This is the highest level recorded, it said.

If all of this tobacco had been consumed in the legitimate market it would have represented an excise amount payable to the Government of a billion Australian dollars, equivalent to £530m, according to KPMG.

The overall level of tobacco consumption in Australia was calculated to be equal to 17.4 million kilograms in the 12 months to June 2013.

This is in line with the 2012 measure, said KPMG, compared to a longer-term annual decline since 2009.

The KPMG report has been submitted to the UK Government review.