Illegal tobacco sales 'on the rise'

A report commissioned by Australia's three biggest tobacco companies says the illegal trade of cigarettes has flourished since the introduction of plain packaging.

File

The report claimed profit from the illegal trade was going to organised crime and costing the government billions.

British American Tobacco representative Scott McIntyre said Australia was losing money.

"They're sending it up to the Asian gangs or the Middle Eastern gangs where they're getting it from," he said.

"It's Australian money getting sent who knows where?"

In a statement, the Federal Health Department responded to the report saying Australia was "proactively pursuing criminals" who faced up to 10 years imprisonment for related offences.

But the tobacco companies allege there is no enforcement.

"They have the power to issue a $340,000 fine per pack for a branded pack in the marketplace, and since plain packaging was introduced they've issued not one fine," Mr McIntyre said.

The report also found that illegal tobacco use had increased 154 per cent in the past year.

Evelyn Platus, proprietor of Sydney’s oldest family owned-tobacconist, said that was an open industry secret.

"It's a very well-know fact that there's a massive illicit market happening," he said.

"If the government listened to the cigarette companies when they speak to them then the reps could tell them exactly where to find it."

For more, watch the full report in the video player above.