Arson attacks target tobacco shops as syndicate demands payments

Firebombings have struck tobacco retailers in Richmond, Mentone and Warragul over the past two weeks. The most recent attack, on Monday in Richmond, destroyed one tobacco shop and damaged about a dozen neighboring businesses along Victoria Street. Eighty firefighters and 25 trucks responded to contain the blaze.

Police sources said the attacks are tied to demands for cash payments from independent retailers, including those selling only legal cigarette brands. The payments are described as an expansion of an earlier scheme that previously targeted shops involved in the illicit market.

One Mentone operator reported finding an extortion note on the door before the premises were damaged in late June.

Background on the extortion scheme The payments, referred to by police sources as the "Kaz tax," began at $2,000 a month in 2023 and rose to $5,000 a month in 2025. The same sources said the scheme now extends to retailers with no connection to illegal tobacco.

Most targeted shop owners have complied rather than risk further attacks. The illicit tobacco market is estimated at more than $8.5 billion nationwide, with black-market products accounting for 80 per cent of nicotine consumed, according to the Australian Bureau of Statistics.

Police sources said the expansion of the extortion model has occurred since last year.

Regulatory challenges Tobacco Licensing Victoria has not initiated any criminal prosecutions since beginning its crackdown six months ago. A spokesperson for the agency stated it has suspended 13 licences, issued 59 infringement notices worth nearly $363,000, and seized more than $9 million in illicit tobacco.