Victoria’s soon-to-be-launched tobacco licensing scheme is facing heavy criticism from retailers and industry bodies, who argue it is flawed, costly, and fails to address the rapidly growing illicit vape market.
Although the licensing system is scheduled to take effect on 1 July 2025, enforcement won’t begin until sometime in 2026. Even then, inspectors will have no authority to tackle illegal vape sales or tobacco pouches, as these fall under Commonwealth law—highlighting a critical gap in enforcement.
Victoria remains the only Australian state without a central register of tobacco retailers, despite a 2022 recommendation to introduce one. While the new licensing scheme is a step towards regulation, key stakeholders argue it’s arriving far too late and in a weakened form.
Costly for Small Retailers
The proposed licence fees—ranging from $1,100 to nearly $1,500—are significantly higher than in other states, where charges are under $500. For many small and independent retailers, already seeing a decline in tobacco sales, the cost may outweigh the benefit of continuing to sell the product.
David Inall, CEO of Master Grocers Australia (MGA), said these high fees could push lawful retailers out of the market, creating more space for the illicit trade. He warned it was unfair for legitimate businesses to shoulder the cost of regulation while illegal operators continued with minimal interference.
Too Few Inspectors, Too Little Power
Only around 14 inspectors will be employed to enforce the scheme across Victoria, a number widely criticised as inadequate. Adding to concerns, these inspectors will not have the authority to close shops selling illicit tobacco—a measure police have said is essential for effective enforcement.
Victoria Police has previously urged the government to allow for business closures under the scheme, citing frustration with current limitations. Detective Superintendent Jason Kelly said shutting down non-compliant shops and revoking licences was key to curbing the illegal trade, noting the futility of raiding a store only to see it reopen the next day.
Federal Law Limits State Action on Vapes
The state government has confirmed inspectors won’t investigate illegal vape sales because such products are regulated at the federal level by the Therapeutic Goods Administration (TGA). The TGA works with state health departments and local councils, but enforcement has proven difficult, especially as criminal groups increasingly dominate the trade.
Environmental Health Officers—typically responsible for public health issues like food safety and water quality—are often reluctant to engage, given the dangers posed by organised crime groups controlling the illicit market.
Dr James Martin, a criminologist at Deakin University, said it was unrealistic to expect council health officers to police an industry now controlled by black-market actors, and that proper law enforcement was needed.
Rising Violence and Community Risk
Since early 2023, Victoria has seen more than 140 arson attacks linked to the illicit tobacco trade, along with several shootings and assaults. The violence has claimed innocent lives, including 27-year-old Katie Tangey, who died in an arson attack on a house she was looking after in Truganina.
Authorities have linked the violence to major crime figures, including Kazem Hamad—believed to be in Iraq—and the Haddara and Barakat families.
Call for a Stronger, Fairer Scheme
Theo Foukkare, CEO of the Australian Association of Convenience Stores, described the situation as a “public safety emergency”. He welcomed the introduction of the licensing framework but warned that without stronger enforcement powers and more reasonable fees, the scheme would fail to achieve its goals.
He also urged the government to extend the licensing system to cover vaping and other nicotine products, stressing the need for a practical, enforceable solution from day one.
Lack of Support for Recommendations
A state parliamentary inquiry into tobacco and vaping control made 27 recommendations, but the government has only fully supported seven. This limited commitment has raised concerns among retailers and law enforcement, who believe the current approach lacks the strength to curb the illegal market.
In the meantime, local councils will continue to support state and federal agencies by reporting illegal activity and educating retailers. However, without meaningful enforcement powers or greater collaboration between levels of government, critics warn the scheme risks becoming little more than a bureaucratic burden on legal businesses.
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