Updated March 15, 2026 — 2:19pm,first published 11:31am
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Victorian authorities will be given the power to shut down dodgy smoke shops, and landlords will get the power to terminate the leases of illegal tobacco shops, under what the Allan government is touting as “Australia’s toughest illicit tobacco laws”.
The Minister for Casino, Gaming and Liquor Regulation, Enver Erdogan, detailed the proposed legislation on Sunday, marking a significant escalation in the state’s efforts to extinguish a violent black market trade linked to more than 200 firebombings.
Illicit Double Happiness cigarettes, which are sold for as low as $13 in stores.Janie Barrett
Under the proposed changes to be introduced before the state election this year, building owners who knowingly lease stores to illicit operators will also face massive financial penalties.
While Erdogan was circumspect on exact figures during a press conference on Sunday, he indicated fines would be commensurate with those in other states and “a lot more than tens of thousands of dollars”. However, landlords will also be granted new legal powers to kick out businesses caught selling illegal products.
The laws would grant new regulator Tobacco Licensing Victoria (TLV) and Victoria Police the authority to issue immediate 90-day closure orders. The courts would also be empowered to impose permanent or indefinite closures.
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“Illicit tobacco fuels organised crime, and we’re shutting down the operators who think they can get away with it,” Erdogan said.
“The message should be very clear: if you’re involved in this illicit trade, there will be tough new penalties.”
The announcement follows the first month of TLV enforcement, in which $5 million worth of illicit stock was seized from shelves, including more than 3.19 million cigarettes, 2243 cigars, 40 kilograms of loose-leaf tobacco and 32 kilograms of shisha tobacco.
The new regulator faced a slow start. In February, on the first day a new licensing requirement for businesses selling tobacco products was in full effect, The Age found smuggled cigarettes being sold from an unlicensed shop just 100 metres from the regulator’s own headquarters.
The state faces an enormous task to wrestle back control from a prolific black market. It is estimated that up to 60 per cent of all cigarettes sold in Australia come from black market sources.
The multibillion-dollar illicit trade has been dominated by rival crime families, including a cartel known as “The Commission” run by gangland boss Kazem “Kaz” Hamad.
While Hamad is currently in an Iraqi prison, the vacancy has sparked a renewed wave of violence across Melbourne as new players compete for a slice of the lucrative market.
Erdogan confirmed there were only 14 TLV inspectors dedicated to taking on the thousands of stores believed to be selling illegal products. On Sunday, he defended the small workforce, arguing the regime is “intelligence risk-based” and will be bolstered by the frontline powers of Victoria Police.
Erdogan conceded some TLV inspectors had already faced threats on the ground. Police sources previously described the planning for the crackdown to The Age as a “total mess,” with significant friction between the new regulator and Victoria Police over providing escorts for inspectors. Victoria Police was not present at the announcement on Sunday, and has been contacted for comment.
Minister for Casino, Gaming and Liquor Regulation Enver Erdogan announces the government’s planned changes on Sunday.Wayne Taylor
Police Association Victoria secretary Wayne Gatt welcomed the new powers but warned that effective enforcement requires a properly resourced police force. He called on the government to restore the force to its intended strength of 17,020 officers, citing the “gravity and scale” of the state’s crime crisis.
A key plank of the new laws is the accountability of property owners. The Shopping Centre Council of Australia welcomed the latest move, saying legislated lease termination rights have proved effective in other jurisdictions.
“Our industry welcomes the Victorian government’s announcement,” council chief executive Angus Nardi said. “The proposed reforms will make a real difference on the ground”.
The Real Estate Institute of Victoria has been approached for comment regarding the culpability of agents and the definition of “knowingly” allowing illegal sales. Real estate agents often act as intermediaries for overseas investors who may have no direct knowledge of their tenants’ activities.
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Legal businesses, which have long called for stronger enforcement as they struggle to compete with $20 illegal packets of cigarettes, welcomed the government’s proposed laws – including the heads of independent supermarket chains present at the announcement.
Ritchies IGA chief executive Fred Harrison, who is also a landlord, said professional property managers had no excuse for ignoring red flags. He cited examples he had seen himself of supposed “barber shops” opening that did not even contain a barber’s chair and sold illegal tobacco.
“Landlords, smart people, have come to the conclusion that it’s a waste of time putting a tobacco outlet in,” Harrison said, noting that insurance companies are now refusing to cover centres that house illicit traders.
Under the new regime, inspectors will be authorised to destroy seized illicit tobacco pre-trial to ensure the product cannot be recirculated. Shops that are shut down will be identified by “bold stickers”, Erdogan said and publicised on the TLV website.
The public is encouraged to use an anonymous tip-off line on the regulator’s site to report non-compliance in their local shopping strips.
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Rachael Dexter is a journalist in the City team at The Age. Contact her at rachael.dexter@theage.com.au, rachaeldexter@protonmail.com, or via Signal at @rachaeldexter.58Connect via Facebook or email.From our partners