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Pay or burn. It\u2019s become an open secret among Victoria\u2019s tobacco shops that you have to pay the \u201ctax\u201d.<\/p>\n
There is no mistaking the threat, not when at least a dozen tobacco shops have already been turned to cinders.<\/p>\n
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CCTV of an arson incident in Moonee Ponds on May 26, 2023, where the offender catches alight.<\/span><\/p>\n \u201cIf you want to open a smoke shop in Melbourne, you have to pay them. You can\u2019t open in their area. They\u2019ve made a kind of cartel,\u201d said an underworld source, who spoke to The Age<\/em> on condition of anonymity.<\/p>\n \u201cPeople are told \u2013 these are the rules. You pay $1000 a week in cash. You sell our cigarettes. You don\u2019t follow the rules, your shop will be burned the next day. You keep going, you get shot. It\u2019s like the old protection money thing.\u201d<\/p>\n The extortion of small tobacco shops, which can be found in virtually every suburban shopping strip, has become a cash cow for criminal syndicates, who are using the lucrative business to fund the drug trade.<\/p>\n The racket has become so profitable that Middle Eastern organised crime gangs and outlaw motorcycle clubs are warring for control<\/span>, extorting and torching shops.<\/p>\n Police intelligence suggests a cartel is now \u201ctaxing\u201d or supplying illicit tobacco to a significant portion of the independent retail market that operates from kiosks and shopfronts. Police and underworld sources said shops that refuse to sell the illegal tobacco are also being torched in retaliation.<\/p>\n The latest attack came on Tuesday morning, after a grocery store that advertised tobacco and vape products online was rammed by a car and set alight in the northern Melbourne suburb of Hadfield.<\/p>\n Fire Rescue Victoria said the car was reversed into the two-storey building housing the Hadfield Finest Fruit & Veg store just after 3am, warping the store\u2019s door and breaking the windows. Firefighters discovered an LPG tank in the back of the vehicle.<\/p>\n The syndicate has spread to extorting shop owners nationwide, including in South Australia and Western Australia.<\/p>\n The trade is estimated to be worth millions \u2013 even tens of millions \u2013 of dollars each year to the racketeers.<\/p>\n And these profits are being ploughed back into criminal activities like drug trafficking and money laundering, six police and underworld sources say.<\/p>\n The racket exploded into public consciousness following more than a dozen arson attacks on tobacco shops stretching from Hoppers Crossing to Wangaratta since late March.<\/p>\n No one has been injured in the firebombings yet, but police say that\u2019s down to sheer luck.<\/p>\n Police are investigating the cause of a suspicious fire at a tobacconist on Young Street in Moonee Ponds.<\/span>Credit: <\/span>Nine News<\/cite><\/p>\n \u201cOnce a fire is started it\u2019s impossible to control. It\u2019s a real worry. These fools, without any planning, are setting shops on fire. It could be the family upstairs asleep that dies,\u201d Detective Inspector Chris Murray, from Victoria Police\u2019s arson and explosives squad, told The Age<\/em>.<\/p>\n The market is being cornered by different players including well-known Middle Eastern crime gangs and outlaw motorcycle clubs, who see these isolated tobacco shops as \u201csoft\u201d targets that can be easily exploited.<\/p>\n The shakedowns have been running for more than a year but largely flew under the radar until the gangs began torching recalcitrant retailers and the \u201cprotected\u201d shops of their rivals.<\/p>\n A Moonee Ponds tobacco and vape store linked to Sam \u201cThe Punisher\u201d Abdulrahim was set alight on three separate occasions in late May and early June. Abdulrahim has previously denied his connection to the business despite promoting it on social media before the attack. The Age<\/em> is not suggesting that Abdulrahim is himself part of any crime gang or involved in the illegal tobacco trade, only that a shop linked to him was a victim of recent attacks.<\/p>\n A tobacco shop linked to a notorious crime family that operates in Melbourne\u2019s western and northern suburbs was also torched earlier this month.<\/p>\n Members of the Finks outlaw motorcycle gang were recently arrested after attempting to stand over a shop owner in Eltham.<\/p>\n \u201cVictoria Police has had no interest in the illegal tobacco trade until now,\u201d Murray said. \u201cBut when we start to see serious crime emanating from what is essentially a turf war about who is going to dominate the illegal tobacco market, we become very interested.<\/p>\n \u201cIf it\u2019s a gap that serious and organised crime think they will be allowed to fill, then think again. Stupidly, they are turning a spotlight on themselves.\u201d<\/p>\n The gangs have been drawn into the market by the massive profits that can be made with relatively low risk compared to drug trafficking.<\/p>\n The underworld source said a full-sized shipping container, which can hold up to 15 million cigarettes, is worth about $4 million in profit.<\/p>\n A packet of cigarettes bought for $2-$5 overseas and smuggled into Australia can be sold for $16 to $20 each when a legally purchased packet costs $30 to $40 or more.<\/p>\n With the price of cigarettes in Australia to increase by 5 per cent in September, law enforcement agencies say the illicit market will only become more alluring.<\/p>\n \u201cYou can make money easier with cigarettes than drugs. What\u2019s the penalty for getting caught making $4 million on tobacco compared to $4 million on cocaine or meth? More than a decade in jail,\u201d the underworld source said.<\/p>\n The aftermath of a suspicious fire in Melbourne\u2019s northern suburbs.<\/span>Credit: <\/span>Nine<\/cite><\/p>\n Illicit tobacco trafficking has historically been viewed as a victimless crime, federal law enforcement authorities say.<\/p>\n The discrepancy between the prison sentences for importing hard drugs as opposed to tobacco is a major concern among state and federal law enforcement agencies, which have been lobbying the government to increase the penalties.<\/p>\n \u201cThere needs to be tougher penalties,\u201d said Murray. \u201cIt\u2019s low risk, high reward. Looking through their eyes, they see it as very low risk.\u201d<\/p>\n Australian Border Force officers intercepted more than 120,000 shipments of illicit tobacco at the border in the past financial year alone, the equivalent of $3.5 billion in lost government revenue.<\/p>\n Deputy Commissioner Tim Fitzgerald said the agency had fought to increase penalties for tobacco smuggling to include custodial sentences of up to 10 years, but it was ultimately up to judges and magistrates to dish out tougher penalties.<\/p>\n \u201cWe\u2019re still in the process of educating the courts around the ramifications of tobacco, how organised crime is involved in using it for drug trafficking and money laundering,\u201d Fitzgerald said.<\/p>\n In 2018, property developer turned cigarette smuggler Nabil Grege received a four-year jail sentence with a minimum of 18 months for illegally importing 18 million cigarettes worth $6.2 million in lost taxes.<\/p>\n Last year, a Victorian man was jailed for a minimum of 18 months on a three-year sentence for evading import duties worth $8.5 million on 10 million cigarettes.<\/p>\n Fitzgerald said more work was needed to further regulate the market and give additional powers to his agency to tackle the illicit trade. Victoria is among the last jurisdictions in Australia that do not require traders to obtain a licence to sell tobacco products.<\/p>\n \u201cWe need to do more work on the licensing regime associated with tobacco and vaping,\u201d he said.<\/p>\n \u201cThese criminal syndicates are sophisticated and run like a business, so they\u2019ll do whatever it takes to ensure that they continue to bring a profit at the expense of legitimate business owners and obviously the wider Australian community.\u201d<\/p>\n<\/p>\n
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