Small businesses located near tobacconists in Australia are reportedly being denied insurance or finding coverage prohibitively expensive. This issue has intensified following a series of firebombings, including a recent blaze in Melbourne that destroyed a Richmond tobacco retailer and nearly a dozen neighbouring shops.
Government data indicates that crime syndicates have been implicated in over 200 firebombings of commercial and residential premises across Australia since 2023. These attacks are believed to be part of a struggle between rival groups for control of the illicit tobacco market.
One Melbourne retailer stated their insurer refused to renew a policy due to their proximity to a tobacconist, while quotes from other insurers reportedly excluded fire cover. Legitimate tobacconists have also reportedly been targeted, making it difficult for them to secure insurance.
Skye Cappuccio, chief executive of the Council of Small Business Organisations Australia, highlighted the growing difficulty for businesses to access or afford insurance in these areas. The Australian Criminal Intelligence Commission also noted that businesses near these firebombings are experiencing reduced foot traffic, revenue, and damage to their reputation.
Suncorp, an insurer, has confirmed it no longer offers insurance cover for tobacconist retailers, including renewals. However, a spokesperson stated that businesses located near tobacconists may still be eligible, with underwriting decisions made on a case-by-case basis, considering factors such as the business's nature and location-specific risks. QBE also stated that decisions are assessed individually and changing risk profiles can influence the price, terms, or availability of cover.
The illicit tobacco market accounted for 80% of cigarettes smoked by Australians in 2025, according to the Australian Bureau of Statistics. Untaxed packets can cost as little as $10, significantly less than the more than $40 for a legal packet.