Philip Morris warns illegal tobacco could wipe out legal trade by 2030 in secret Senate hearing
Executives claim organised crime threats justify closed-door session, but critics say the move violates a World Health Organization agreement on transparency while illegal sales already account for half the market
Philip Morris International executives have warned that rising illicit trade could eliminate legal tobacco products in Australia by 2030, a dire prediction delivered during a closed-door Senate hearing that has drawn significant controversy. The company argued that lowering federal excise taxes is necessary to undercut hidden market operators, a stance presented in a session that broke more than 15 years of precedent under a World Health Organization agreement mandating transparency from tobacco manufacturers.
The hearing took place in Canberra on Monday, facilitated by South Australian Liberal Senator Leah Blyth, and involved three unnamed Philip Morris employees giving evidence. While the company submitted a public document, it was not included on published hearing programs, a move that has sparked criticism from the federal government and health groups. Philip Morris claimed that executive identities must remain secret due to threats from organised crime, though critics argue this justification violates the WHO Framework Convention on Tobacco Control signed in 2004.
The federal illicit tobacco and e-cigarette commissioner noted that illegal sales currently account for between 50 per cent and 60 per cent of the Australian tobacco market, with sales valued at approximately $6.9 billion. Despite the scale of the illicit trade, the company's proposal to reduce taxes has been met with scepticism. Federal Customs Minister Julian Hill stated that tobacco manufacturers have historically failed to answer questions regarding commercial data and supply chains, accusing them of selling surplus production into illegal markets.
Health Minister Mark Butler wrote to MPs urging them to adhere to the WHO framework convention, which requires industry to be answerable for evidence regarding public decisions impacting their profits. He emphasised that the agreement is designed to prevent interference in public health policy by cigarette manufacturers. The federal government and opposition parties condemned the secrecy, with the Greens and health foundations arguing that the closed-door nature of the inquiry undermines public trust.
Critics described the decision as inviting the enemy into the war room. Heart Foundation adviser Professor Garry Jennings warned that big tobacco would simply argue for a reduction in excise to sell more cigarettes legally, noting the company has no interest in public health or safety. Lung Foundation Australia chief executive Mark Brooke added that transparency must be non-negotiable and that the focus should be on stronger enforcement and tougher penalties rather than secrecy.
The controversy highlights the tension between corporate warnings of market collapse and the government's commitment to public health policy. While Philip Morris insists that lower taxes are the only way to combat organised crime, officials maintain that Australia will not surrender health policy or engage in a bidding war with criminal elements on the price of tobacco.
