January 2nd 2025.
The leading independent supermarket chain in Australia has recently revealed that their stores are facing significant losses in legal cigarette sales. This can be attributed to the alarming increase in the illicit tobacco trade. The CEO of IGA, Fred Harrison, is now urging the government at both federal and state levels to take more decisive action in curbing this illegal activity.
According to reports, the supermarket giant has suffered a staggering loss of $150 million in legal cigarette sales over the last three years alone. This is a worrying trend that has prompted Harrison to speak out against the unfair advantage that illegal tobacco traders have over legitimate retailers. He stated, "The bad guys are winning and it's the wrong end of town that's profiting from this illegal trade."
Further analysis by IGA has revealed that customers who come in to purchase cigarettes also tend to spend an average of $25 on other groceries, such as bread and milk. This translates to an additional loss of $30 million in revenue for the chain over the same period. As a result, IGA has been forced to make difficult decisions, including staff reductions and a $15 million cut in their wage bill.
Harrison expressed his concern over the impact of these losses on their workforce, saying, "That's a lot of people to let go just because we are being outplayed by illegal operators. Unless the government takes serious action to address this issue, it will only continue to grow and cause more harm."
The decline in cigarette sales has not only affected IGA but also other major supermarket chains, such as Woolworths, which reported a 19% loss year-on-year. Victorian Premier Jacinta Allan acknowledged the gravity of the situation and assured the public that the government is actively working towards curbing the illicit tobacco trade.
In response to the growing concerns, independent supermarket owners are calling for a halt on tax increases on tobacco. They argue that this will help reduce the gap between legal and illegal products. However, anti-smoking groups have refuted this claim, stating that it is not a viable solution to the problem.
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