The Tobacco Stakeholder Group agendas, minutes and related papers are not binding on the ATO, Customs and Border Protection Service or the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.
Agenda item 1
The Chair welcomed new members to the meeting and acknowledged the excellent contribution and support given to the Group from former members, Mark Dimech from BATA, and Kingsley Woodford Smith from Customs. Members requested that the Minutes reflect their appreciation for the commitment and work of Mark and Kingsley. The Committee also thanked Natalie Toms and Anthony Millgate for their participation in the forum.
No conflict of interest was declared. The minutes of the previous meeting were accepted without change. All action items from the previous meeting have been completed.
Agenda item 2
- ATO - Compliance activities
- Customs and Border Protection Service - Six monthly update on illicit tobacco
- Department of Health - Protocol on Illicit Trade update
The ATO is actively supporting a number of ‘Waterfront Taskforces’ in four States:
The ATO has an officer seconded to the Australian Federal Police (AFP) to support the organised crime related multi-agency Trident Taskforce efforts.
We have engaged with and sought intelligence from Operation Trident in relation to organised crime entities who may be involved in illicit tobacco.
The ATO focus is on the whole of the tobacco product not just illicit tobacco:
At the previous Stakeholder Forum Pauline outlined the issue of determining tobacco origin and the negative impact that this had in legal proceedings. She had noted that work is being undertaken on this matter by Serious Non-Compliance, ATO.
Customs and Border Protection Service
Customs is part of the joint taskforce Trident along with:
AUSTRAC, VICPOL, NSWPOL and the AFP. No illicit tobacco has been found in plain packages. Customs advised that they will provide a list of brands seized in raids as part of Trident.
Customs provided their six monthly report on 'Illicit Cigarette and Tobacco Detection' with details on cigarette and tobacco detections via sea, air, mail, passengers streams and crew.
Analyses have revealed that tobacco detections are trending down, cigarettes are trending up. Previously, detections were higher in NSW (Sydney); however, Melbourne seems to be increasing as offenders try to keep ahead of regulators.
Indonesia still leads the list of countries were most illicit product is derived.
Department of Health
Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products
The Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol) was adopted in November 2012. The Protocol will be open for signature until 9 January 2014. As at 25 October 2013, 36 Parties have signed the Protocol. No parties have ratified it. From 10 January 2014, signature of the Protocol will no longer be possible, but countries will be able to accede to the Protocol. This is a one-step expression of consent to be legally bound and has the same effect as ratification. Accession should only be progressed once all the necessary domestic laws to implement obligations under the Protocol are in place.
Australia has commenced work on the domestic processes that precedes a decision on whether to sign and ratify the Protocol. Allen and Clarke Policy and Regulatory Specialists (Allen and Clarke), has been commissioned to develop the Regulation Impact Statement (RIS) to inform Australia’s decision on whether to sign and ratify the Protocol. Allen and Clarke undertook a targeted consultation in May 2013, distributing a consultation document and holding face to face consultations with key stakeholders.
Written submissions were due in June 2013 and the Department is currently working with Allen and Clarke to finalise the RIS for provision to the Office of Best Practice Regulation.
Tobacco plain packaging
Health is still receiving a number of inquiries and complaints in relation to tobacco plain packaging on the complaints line. It is also receiving inquires and complaints relating to other legislation including that of the states and territories; these are then referred to the relevant agency for consideration and action as appropriate.
Given that there are major areas of non-compliance with specialist retailers, it was suggested that fact sheets and posters could possibly be developed on plain packaging with a GST / indirect tax angle. The possibility of preparing this material will be investigated with Health providing input on content and images as appropriate.
Action item: 291013 - 2-1
Due date: as soon as possible
Responsibility: Customs (Adam Freiderich)
Provide brand details of seized cigarettes as part of Trident to secretariat for circulation to members.
Secretariat note: List provided on 8 November; circulated to members on the same day
Action item: 291013 - 2-2
Due date: as soon as possible
Responsibility: ATO (Peter Harding) with support from Department of Health (Lloyd Weedall), as appropriate
Investigate the possibility of preparing fact sheets / posters on plain packaging for retailers and tobacconists with a GST / indirect tax angle.
Agenda item 3
- KPMG report on 'Illicit Tobacco in Australia'
- industry updates
KPMG provided a presentation of the soon to be released report on 'Illicit Tobacco in Australia' (embargoed copy).
Secretariat note: report publicly released on 4 November 2013.
The report noted that in the last twelve months to the end of June 2013, the level of illicit consumption grew from 11.8% to 13.3%. There has been a gradual increase in illicit tobacco consumption (calculated to be equal to 17.4 million kilograms in the twelve months to June 2013), in Australia since 2007. The report concluded that the key driver of illicit growth has been a large increase in the consumption of illicit manufactured cigarettes, primarily in the form of contraband.
Illicit whites have emerged as a major form of contraband. They are manufactured cigarette brands that are not legally registered for sale in any market and are typically manufactured for the purposes of smuggling. Manchester is currently the largest illicit white brand in Australia.
Barry Wilson agreed to provide information on illicit ‘pop-up’ tobacconist intelligence to the secretariat for circulation to members.
At the last meeting, Mark Dimech from BATA (former member) proposed undertaking a role framework project. The ATO and Customs referred the proposal to Executives in their respective agencies. Pauline advised that neither the ATO nor Customs would be proceeding with the proposal as it was considered that there was already sufficient clarity and information in member’s roles.
Excise Equivalent Goods (EEG) administration consultation
Pauline advised that there was no further information or update on the EEG administration consultation which took place in November / December 2012. The ATO is waiting on advice from the new Government. The ATO will inform forum members of any decisions and outcomes when available.
'Pop up' tobacconist
As part of BATA’s industry update Barry Wilson updated the Forum on the 'pop up' tobacconist phenomenon that is particular to Victoria. He noted that these outlets are found both in suburban Melbourne and rural areas.
They rarely sell legitimate brands and derive the majority of their income from the sale of contraband cigarettes and tubes prefilled with 'chop chop'.
Action item: 291013 - 3-2
Due date: as soon as possible
Responsibility: Barry Wilson (BATA)
Members were asked to consider what could be done to eliminate these outlets and ideas such as educating retailers with flyers and working with Vic Health. Any additional ideas will be discussed at the next forum.
Provide illicit ‘pop up’ tobacconist intelligence to the secretariat for circulation to members.
Secretariat note: Illicit tobacco report for Victoria received and circulated to members (5 March 2014)
Agenda Item 4
- Other business
- Charter and forum discussion
Pauline advised that forum charters are now generic across all ATO forums and generally, forum memberships have reduced, however, membership of the Tobacco Stakeholder Group has remained stable.
Members were pleased that the forum will continue to be part of the ATO direct consultation process since the consultation review and changes were implemented on 1 July 2013.
Pauline thanked everyone for their attendance and participation.
The next meeting will take place in April 2014 (date to be confirmed).