Australia’s Retail Safety Crisis: Illicit Tobacco, Rising Crime and the Need for Policy Reform
Retailers Highlight Business Pressures as Illicit Nicotine Disrupts the Market
Australian retailers are drawing attention to the growing impact of the illicit nicotine market on day‑to‑day trading conditions, noting that unregulated products continue to shift customer behaviour in ways that legitimate businesses cannot match.
Retailers across the country report that illegal nicotine products are affecting lawful tobacco sales, which remain an important part of the revenue mix for many convenience operators. These shifts are occurring at a time when the sector is already managing rising costs and softer consumer spending.
The experience of Ampol’s U Go outlets is often referenced within the industry as an example of how even well‑resourced operators are adapting to a changing retail landscape.
Retailers say this demonstrates that the pressures are broad and not limited to smaller businesses.
Rising Retail Safety Incidents Underscore Urgent Need for National Action
Australia is experiencing a significant and sustained rise in retail safety incidents, with new data highlighting increased theft, aggression, and violence impacting both workers and shoppers.
Recent analysis of police reports shows retail crime has surged dramatically in major cities. Melbourne recorded an *81.6% year‑on‑year increase in retail crime—the steepest rise in the country—while Adelaide reported a *53.2% increase over the same period. Researchers attribute this escalation to organised criminal activity, including the ongoing illicit tobacco conflicts and associated shoplifting patterns.
Nationally, theft has reached its highest levels in more than two decades. The Australian Bureau of Statistics reported *595,660 theft victims in 2024, a 6% rise on the previous year, with *nearly half of all theft incidents occurring in retail settings. This trend is mirrored in shopping centres and local retailers, where frontline staff are increasingly confronted by aggressive behaviour, physical threats, and organised criminal groups.
Industry bodies warn that the safety of retail workers is reaching a critical point. A 2025 sector report notes escalating incidents of aggression, harassment and violence, driven by more brazen criminal activity and prolonged cost‑of‑living pressures. The report also highlights rising legislative responses, including proposals for harsher penalties for assaults on frontline staff in several jurisdictions.
Retail associations and security experts emphasise that the problem extends beyond financial loss. Retail crime “endangers frontline staff, increases costs for consumers, and reduces the appeal and safety of retail precincts for local communities.” The Australian Retailers Association and National Retail Association continue to call for greater collaboration between industry and law enforcement, stronger reporting mechanisms, and expanded investment in safety and prevention technologies.
At a national level, retailers are increasingly working with law enforcement to combat organised retail crime networks. Recent joint operations have dismantled major crime rings responsible for millions of dollars in stolen goods, demonstrating the importance of coordinated action in reducing community harm.
The rise in retail safety incidents is a threat not only to business viability but to the wellbeing of the Australian public. With retail workers facing unprecedented risks, and consumers increasingly exposed to unsafe environments, a coordinated national response is urgently required.
We are calling on government, industry, law enforcement and community partners to work together to:
- Strengthen penalties for violent and repeat retail offenders
- Improve intelligence‑sharing across jurisdictions
- Expand community safety and prevention programs
- Increase support for frontline retail workers and businesses experiencing harm
Australia’s retail sector is a cornerstone of local communities. Ensuring it remains safe for workers and customers must be a national priority.
Retail Crime in Australia: The Facts Behind a Growing Crisis
Retail crime in Australia has escalated sharply over the past two years, with national data showing a 20–30% increase in incidents across major states. In Victoria alone, police recorded more than 6,000 retail‑related offences last year, including theft, assaults, and armed robberies. New South Wales and Queensland have reported similar upward trends, with organised groups increasingly involved in illicit tobacco‑related crime.
Convenience stores and small retailers are among the hardest hit. Industry surveys show that over 85% of retailers have experienced theft, threats, or violence in the past 12 months. Many report rising insurance premiums, higher security costs, and staff unwilling to work late shifts due to safety concerns.
A significant driver of this trend is the growth of the illicit market. Police investigations in multiple states have linked store break‑ins, firebombings, and extortion attempts to organised groups seeking control of distribution.
At the same time, retailers are dealing with rising operating costs, soft consumer spending, and the loss of lawful sales. A combination that leaves many small businesses financially vulnerable and less able to invest in security.
These facts paint a clear picture: retail crime in Australia is not only increasing, it is becoming more organised, and more violent. Retailers say the trend is unsustainable and are calling for coordinated national action to protect workers, customers, and communities.
Australia Must Learn From the UK
The UK’s “triple whammy” experience is not a distant warning, it is a real‑time case study for Australia, and retailers are asking the Government to listen.
Between late 2023 and 2025, the UK Government announced plans to ban disposable vapes and tighten nicotine rules. In 2024, retailers were required to remove compliant products, update stock, and absorb new compliance costs.
As these restrictions took effect, the UK saw a sharp rise in illicit vape sales, with enforcement agencies reporting significant increases in illegal imports and unregulated products entering stores.
By 2025, analysts and retail groups described a clear “triple whammy”: lost legal sales; higher operating costs; and a rapidly expanding black market that enforcement struggled to contain.
Australian retailers say we cannot ignore the role and impact of price and excise settings. With the growing gap between legal and illegal products, now also replicated in the vape category, recent history is repeating.
When legal products cost many times more than illegal ones, consumers shift, and retailers lose out. In Australia legitimate businesses are being weakened, criminal networks are growing stronger, and communities are becoming less safe.
Retailers are calling for changes.
Retailers Warn Illicit Tobacco Will Keep Surging Unless Australia Resets Its Excise Strategy
Australian retailers are sounding the alarm as new data shows the illicit tobacco market is expanding at a pace enforcement alone cannot contain. According to Oxford Economics Australia, illegal tobacco already accounts for 50–60% of consumption, and is forecast to reach 89% by 2028–29 if current settings remain in place.
The reason is clear: the price gap between legal and illegal products has blown out dramatically. Over the past decade, that gap has widened from $11 to $47, pushing more smokers toward unregulated products.
Meanwhile, legal tobacco prices, driven by one of the world’s highest excise regimes, have climbed to more than $40 per pack, while illicit packs sell for $10–$15.
This shift is already hitting the federal budget. Tobacco excise revenue has collapsed from $16.3 billion in 2019/20 to $7.4 billion this financial year, despite repeated tax hikes.
Retailers say the consequences are no longer just economic. The booming black market is fuelling organised crime, with illegal networks linked to intimidation, arson attacks, and violence against small business owners, issues now widely reported across the country. Illicit tobacco crime is spilling into communities, placing workers and customers at risk.
Governments continue to emphasise enforcement, and retailers strongly support tougher penalties and coordinated policing. But experts, including economists and former regulators, warn that enforcement cannot succeed while the excise‑driven price gap remains so extreme. Treasury itself has acknowledged that “less is more” when it comes to tobacco tax, as high prices increasingly push consumers into the black market.
Australian retailers are urging governments and policymakers to take a broader, more coordinated approach to addressing the country’s rapidly expanding illicit tobacco market.
Media continue to report on violent incidents linked to illegal tobacco networks, including firebombings of convenience stores in Melbourne, armed robberies in Sydney, and intimidation of small business owners who refuse to stock illegal products. These stories reflect a pattern that retailers say is becoming disturbingly common: legitimate operators living in fear while criminal groups profit.
At the same time, political leaders have emphasised the need for stronger law‑enforcement action. States such as Victoria, New South Wales, and Queensland have launched multi‑agency taskforces, seized millions of dollars’ worth of illegal products, and increased penalties for offenders. Retailers welcome these steps and recognise the commitment behind them.
Retailers say the combination of high excise, organised criminal activity, and inconsistent enforcement has created a perfect storm, one that places workers at risk and undermines the viability of lawful businesses already struggling with rising costs and soft consumer spending.
Retailers stress that the goal is not to weaken public‑health objectives, but to ensure that policy settings do not unintentionally fuel a criminal market that threatens workers, communities, and legitimate businesses.
As the illicit trade continues to grow, the question becomes unavoidable: What needs to change to make Australia safe again, for retailers, for consumers, and for the communities they serve?
