Mark Butler’s vaping nightmare only gets worse
Posted on August 19, 2023 By Colin
MARK BUTLER'S CRACKDOWN ON VAPING is rapidly becoming a disaster. Recent reports of the firebombing of tobacconist and vape shops in Victoria are an inevitable result of handing the control of vapes and tobacco over to criminal networks and motorcycle gangs.
But things will only get worse. According to Deakin University criminologist Dr James Martin, it is creating a whole range of unintended consequences:
Certainly will Colin. The government is creating a nightmare of unintended consequences, while at the same time as missing out on a massive opportunity to put a dent in smoking rates.
— Dr James Martin (@jamomartin) August 18, 2023
Rampant black market
Since the Health Minister’s further crackdown was announced, the sale of illicit disposables in Australia has exploded and has taken over the vape market. Illegal, unregulated disposable vapes are sold openly at thousands of retail outlets across Australia, in convenience stores, tobacconists, hairdressers, petrol stations, cafes and vape shops. They are also easily accessible and on social media such as Snapchat, LinkedIn and Instagram. Uber drivers pull out price lists for young customers and sell vapes in transit.
Where products were previously sold cautiously under the counter, they are now displayed blatantly without fear. Products are openly visible and price sheets are on display. Profit margins are massive and the small risk of a minor fine is no deterrent.
One convenience store recently reported a $30,000 turnover per week after only 2 months of selling illegal disposables. They keep a small number of vapes instore while thousands of units are in a van at the back, to minimise exposure in the event of a raid
Vape shops report that many customers are switching from traditional refillable devices to illegal disposables, adding to the market size.
Reports to state Health Departments of illegal sales fall on deaf ears and policing is almost negligible.
Criminal supply chain
The illegal disposable market is comprised exclusively of Chinese products made in Shenzhen, in southern China. Most are delivered in bulk by shipping containers and the Chief of the Australian Border Force has acknowledged the ABF does not have the resources or interest to detect and intercept them.
Vapes are then moved to warehouses onshore and distributed to retailers on demand. This week, a single warehouse in Perth was found to contain 300,000 illicit vapes, as well as over 10 tonnes of illegal prescription drugs and "nangs".
A massive well organised network of agents or ‘traders’ has been established to supply the Australian market. Some of this industry is run by established criminal networks that already import illicit tobacco. Vapes are distributed along with chop chop. and illicit cigarettes and other contraband through established pathways.
The involvement of criminal organisations has led to gang wars, extortion and intimidation of shop owners, firebombing of vape and tobacco shops and even murder
The profits are laundered and used to fund other criminal activities.
Retailers are being bombarded with emails from Chinese manufacturers and local agents offering to supply and deliver disposable vapes for $10 or so, which they then onsell for $30-40. There is no GST, excise or tax payable, increasing profit margins and losses to government revenue.
An army of agents makes door-to-door visits to retailers with price lists, offering to supply the illicit products.
None of these products are made by tobacco companies, although the Health Minister frequently makes this claim.
Closure of the retail vape industry
Legitimate vape shops, distributers and online businesses which only sell legal products are under severe financial pressure, reporting losses of 50-70% income since the COVID pandemic.
Industry insiders predict that most of the 280 retail vape shops will be closed by the end of next year
Some small business owners with leases, shop fittings and unwanted stock will suffer huge losses. Hundreds of workers will be unemployed. However, retailers who sell the illicit products continue to make huge profits.
The failed prescription model
Very few vapers now get a prescription for nicotine. Many report difficulty finding a doctor who will provide a prescription and cash-strapped vapers are unwilling to pay for a visit. Why would you when illegal disposables are available on every street corner?
Pharmacists are reporting very low sales and few are willing to stock vapes as the demand for legal products has almost dried up.
New Zealand retailers report that only 25-30% of orders are now accompanied by a prescription. The risk of interception for the thousands of small parcels delivered to Australia each day is so small, customers are willing to take the risk.
Urgent reform needed
The vaping ban has been a total failure and is getting worse. Industry insiders expect the black market to expand further if Butler’s crackdown is implemented. The number of vapers will continue to grow under the proposed regulations and very few vapers will get a prescription.
The Health Minister’s major aim is to stop vaping among children. The regulations are having the opposite effect, and are creating easy access for kids through the black market
It will get harder and harder to undo the damage done by this flawed vaping ban. The only solution is to legalise and regulate vaping products. The time to act is now.