Pubdate: Sun, 04 Nov 2001
Source: Sunday Telegraph, The (Australia)
Copyright: 2001 News Limited
Contact:  http://www.news.com.au/
Details: http://www.mapinc.org/media/436
Author: Simon Kearny

ILLICIT LEAF TRADE UP - DPP TARGETS TOBACCO

GROWING illegal tobacco is more profitable than marijuana, 
Australia's top prosecutor has revealed.

Commonwealth Director of Public Prosecutions, Damian Bugg QC, says 
there has been a marked increase in the number of prosecutions of 
people for selling black-market tobacco, otherwise known as 
``chop-chop''.

``The indications are that chop-chop is a burgeoning industry which 
promises greater profits than growing cannabis and is seen to involve 
less risk,'' Mr Bugg said. ``Many of the cases referred to the DPP 
have involved the evasion of over a million dollars worth of excise.''

Australian tobacco growers, mostly around Mareeba in Queensland and 
Myrtleford in Victoria's Ovens Valley, can make up to $900,000 a year 
cultivating illicit leaf.

Growers legally produce about 180 bales a year (5250kg), which they 
sell to tobacco companies for about $170 a bale. The Federal 
Government tax on a bale is $8900, which has resulted in a 
black-market price of about $5000 a bale, more than 29 times the 
legal price.

Mr Bugg said the more serious cases were prosecuted under the 
Commonwealth criminal law and carried penalties of up to 10 years in 
prison.

The rush of cases came after the Australian Tax Office (ATO) took 
over the full investigation of the illegal tobacco trade from Customs 
in May.

``Queensland and Victoria, being the main tobacco-growing regions, 
have seen the bulk of the cases,'' Mr Bugg said. ``In the first six 
months of last year, DPP Melbourne received four new excise cases.

``In the second six months there were 35 new cases in the office.''

The growers of illicit tobacco are not the only culprits.

Significant amounts of counterfeit cigarettes are smuggled into 
Australia every year.

The illegal trade in cigarettes costs taxpayers about $500 million a 
year in unpaid excise, with an average packet of cigarettes 
attracting a tax of about $7.50.

The May Budget papers revealed the $500 million drop in excise and 
put part of it down to the success of the anti-smoking drug Zyban and 
the rest down to illegal tobacco, the full cost of which does not 
show up.
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