- within Criminal Law topic(s)
- in Australia
- within International Law, Antitrust/Competition Law, Government and Public Sector topic(s)
Dealing with Illicit tobacco is not just a regulatory issue;
it's a criminal offence that can carry heavy penalties in
Victoria. Whether you're a retailer, importer, or consumer,
understanding what counts as 'illicit' under Victorian law
is critical to avoiding prosecution.
In this article, we explain what constitutes illicit tobacco, how
it is treated under Victorian and Federal law, and what legal
consequences individuals and businesses may face if charged.
What is Illicit Tobacco?
Illicit tobacco refers to tobacco products that are produced, imported, sold, or possessed in breach of Australian law. This includes violations of:
- Customs and excise tax regulations (i.e., unpaid duties),
- Packaging and labelling laws (e.g., plain packaging),
- Licensing requirements under state law,
- Bans on certain products like flavoured or non-compliant vapes.
Common Types of Illicit Tobacco Include:
- Unbranded loose-leaf tobacco ("chop-chop")
- Tobacco without health warnings or plain packaging
- Counterfeit cigarettes mimicking legal brands
- Tobacco with unpaid customs or excise duties
- Smuggled tobacco products without proper declaration
- Nicotine vapes sold without a prescription or licence
Illicit tobacco is prosecuted under both state and federal legislation, with overlapping offences and penalties.
Under Victorian Law – Tobacco Act 1987 (Vic)
From 1 July 2025, the Tobacco Amendment Act 2024 introduced tighter regulation and criminal offences relating to the possession of illicit tobacco, the sale or storage of tobacco without a licence, and the supply of tobacco in breach of packaging and labelling requirements.
These are summary offences but can attract serious penalties, particularly for commercial quantities.
Under Federal Law – Excise Act 1901 (Cth) & Customs Act 1901 (Cth)
The Australian Border Force and Australian Taxation Office (ATO)
also prosecute offences involving the possession of tobacco without
excise payment, importing undeclared tobacco, and producing tobacco
without a licence.
Federal penalties can include fines in the hundreds of thousands of
dollars and imprisonment for serious exampled of breaches of the
Act.
Under Federal Law – Excise Act 1901 (Cth) & Customs Act 1901 (Cth)
The Australian Border Force and Australian Taxation Office (ATO) also prosecute offences involving the possession of tobacco without excise payment, importing undeclared tobacco, and producing tobacco without a licence.
Federal penalties can include fines in the hundreds of thousands of dollars and imprisonment for serious exampled of breaches of the Act.
Penalties for Illicit Tobacco Offences
Penalties depend on whether the offence is prosecuted under state or federal law and the scale of the operation.
Under the Tobacco Act 1987 (Vic)
| Offence | Maximum Penalty (Individuals) | Maximum Penalty (Businesses) |
|---|---|---|
| Possession of illicit tobacco | 840 penalty units (~$168,000) or 5 years' imprisonment | 4,200 penalty units (~$840,000) |
| Sale of illicit tobacco | 1,800 penalty units (~$360,000) or up to 15 years' imprisonment | 9,000 penalty units (~$1,800,000) |
| Supplying tobacco products or vapes to persons under 18 | 120 penalty units (~$24,000) | 600 penalty units (~$120,000) |
| Repeat offending | Higher penalties and likelihood of imprisonment, not infringement notices |
Under Federal Law
| Offence | Penalty |
|---|---|
| Possession of excisable tobacco products without payment of duty | Up to 2 years' imprisonment and/or fines of up to 5 times the duty payable |
| Smuggling tobacco or vapes | Up to 2 years' imprisonment or the greater of: 500 penalty units or 5 × the amount of duty |
| Manufacturing tobacco without a licence | Up to 2 years' imprisonment and seizure of all goods and equipment |
Legal Exposure: Who's at Risk?
Illicit tobacco charges can affect a wide range of individuals and businesses, including:
- Convenience stores and small retailers stocking tobacco from unauthorised suppliers
- Importers bringing in unregistered product or product with incorrect declarations
- Warehouse operators storing products for third parties
- Consumers found in possession of large quantities of illicit tobacco, particularly if packaged for resale
Even innocent possession, such as holding tobacco unaware of its illicit nature, does not necessarily protect you from prosecution. There would be obligations placed on you to demonstrate your state of knowledge about the lawfulness of the product.
What Are Your Defence Options?
Being charged does not mean you are automatically guilty. At Doogue + George, we assess each case to identify viable defences, including:
- Honest and Reasonable Mistake of Fact
You believed the tobacco was lawfully obtained — for example, relying on reasonable assurances from a supplier. - Procedural Defences
Was the search and seizure conducted lawfully? Was there a valid warrant? These issues can lead to exclusion of evidence. - Lack of Possession or Control
In some cases, the prosecution must prove that you had knowledge of and control over the illicit goods. - No Intent to Sell
For possession-based offences, we may argue there was no intention to sell or distribute, especially where quantities are borderline.
Our lawyers can also explore negotiated resolutions, such as diversion or alternative plea deals, especially for first-time offenders or those unknowingly involved.
What to Do If You're Charged or Investigated
If you've been served with a charge sheet, search warrant, or seizure notice, you should seek urgent legal advice before giving an interview to the police, preserve all records relating to your supply chain and sales and avoid discussing the matter with any staff or suppliers.
How We Can Help
The crackdown on illicit tobacco in Victoria is part of a
broader national enforcement trend. Issues relating to the sale and
possession of illicit tobacco is often a feature of news media. The
penalties are real and the consequences can be severe for those
caught unaware or unprepared.
If you're under investigation or facing charges, expert legal
advice is essential. Acting early can give you the best chance of
resolving the matter favourably.
At Doogue + George, we have a strong track record in defending
regulatory and criminal offences involving illicit tobacco. We
represent clients across Victoria and can assist with defending
criminal charges; challenging search warrants and the evidence
found during illegal searches; negotiating with Australian Federal
Police, Victoria Police, or the ATO; and minimising the penalties
whilst protecting your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
