Arson attacks related to illegal tobacco trade are also causing revenue and reputation problems for neighbouring businesses.
The problem has intensified after a spate of firebombings, which includes a recent Melbourne fire that destroyed a Richmond tobacco retailer and nearly a dozen neighbouring shops, needing 80 firefighters to contain.
A Melbourne retailer, who asked not to be identified, told Guardian Australia their insurer refused to renew a policy because they were a “few doors down” from a tobacconist.
Illicit tobacco accounted for 80% of the cigarettes smoked by Australians in 2025, according to the Australian Bureau of Statistics, with untaxed packets costing as little as $10 compared with more than $40 for a legal packet.
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Arson attacks related to illegal tobacco trade are also causing revenue and reputation problems for neighbouring businesses.
Small businesses located near tobacconists are being denied insurance or priced out of coverage as rising arson attacks turn neighbouring shops into collateral damage.
The problem has intensified after a spate of firebombings, which includes a recent Melbourne fire that destroyed a Richmond tobacco retailer and nearly a dozen neighbouring shops, needing 80 firefighters to contain.
Crime syndicates have been implicated in more than 200 firebombings of commercial and residential premises in Australia since 2023, according to government data, as rival groups vie for control of the illicit tobacco market.
A Melbourne retailer, who asked not to be identified, told Guardian Australia their insurer refused to renew a policy because they were a “few doors down” from a tobacconist.
The retailer said they’d received quotes from other insurers that don’t include fire cover.
Skye Cappuccio, the chief executive of the Council of Small Business Organisations Australia, said accessing or affording insurance for businesses located near tobacconists was becoming problematic.
Illicit tobacco accounted for 80% of the cigarettes smoked by Australians in 2025, according to the Australian Bureau of Statistics, with untaxed packets costing as little as $10 compared with more than $40 for a legal packet.
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