IGA, Australia’s leading independent supermarket chain, is facing significant financial losses in legal cigarette sales, amounting to $150 million over the past three years, due to the growing illicit tobacco market. IGA’s CEO, Fred Harrison, urged both federal and state governments to intensify efforts against this illegal trade, which he claims allows “bad guys” to profit unlawfully.
The chain discovered that customers purchasing cigarettes typically spend an additional $25 on groceries, leading to an estimated $30 million loss in potential revenue related to these purchases. In response, IGA has been forced to reduce staffing and cut wages by $15 million, impacting numerous jobs. Harrison commented on the necessity for governmental action, stating that without it, the issue will exacerbate.
Notably, other supermarket giants like Woolworths have also reported declines in cigarette sales, with a 19% year-on-year drop. Victorian Premier Jacinta Allan acknowledged the ongoing work to combat illicit tobacco, while independent supermarket owners argue that the federal government must reconsider tax increases to bridge the price gap between legal and illegal products—a point contested by anti-smoking organisations.