Victoria's Allan Labor Government is intensifying its crackdown on illicit tobacco, with Tobacco Licensing Victoria beginning enforcement of the state's new tobacco licensing scheme. At the heart of this tougher approach lies an emerging accountability mechanism: holding building owners financially responsible for knowingly enabling illegal operators to trade from their premises.
Tobacco retailers must have lodged applications before 1 February 2026, when licences became mandatory. Anyone found selling illicit tobacco faces fines of up to $370,000 or up to 15 years in jail, while businesses risk fines of more than $1.8 million. Yet these penalties alone have proven insufficient in other jurisdictions to stop the trade. The infrastructure of illegal tobacco sales depends on property owners willing to ignore their tenants' activities, or worse, deliberately complicit in them.
Victoria's approach mirrors developments in neighbouring states. Unlike NSW and Queensland, Victoria has not yet introduced landlord-specific powers to terminate a lease based on a tenant's licensing status, though Victoria has introduced a tobacco business licensing scheme. However, the direction of reform is clear. New South Wales has already introduced lease termination powers for landlords and is reviewing whether to introduce penalties for landlords who knowingly lease their premises to illegal tobacco and vape suppliers.
Queensland has moved even more aggressively. Under proposed new laws, Queensland landlords who do not evict tenants using their premises to sell illegal tobacco and vapes face a maximum fine of more than $160,000 and one year in jail, with corporations risking a maximum fine of more than $800,000.
The case for landlord accountability rests on a practical reality: illegal tobacco networks are difficult to dismantle when property owners have no legal skin in the game. One of the biggest challenges for law enforcement agencies is that, even after searches, arrests, and prosecutions, the stores involved are still able to continue operating the next day. A building owner who receives steady rent from a dubious tenant faces no legal consequence, even if they know perfectly well what is happening inside their premises. Imposing financial penalties addresses this perverse incentive.
There are legitimate concerns about the scope and fairness of such laws. Property owners cannot always monitor their tenants closely, and small landlords may struggle to evict sophisticated criminal operators. Landlords leasing premises to tobacco retailers should be aware of the scheme and consider whether their lease agreements adequately address compliance obligations.
The momentum for stronger landlord accountability appears unstoppable. Since the Victoria licensing scheme started on 1 July 2025, Tobacco Licensing Victoria has received more than 4,100 licence applications, with more than 2,000 licenses now granted. With legitimate operators struggling to compete against cheap illegal product and organised crime entities, Victoria's proposed expansion of landlord liability may be the missing piece of a regulatory puzzle that NSW and Queensland have already begun solving.