TOBACCO “WAR”

Star (Christchurch), Volume XLIV, Issue 521, 2 August 1932, Page 5

TOBACCO “WAR”

“ Retail Trade at Mercy of Gangsters.” STARTLING ALLEGATION. (Special to the “ Star.”) MELBOURNE, July 26. The sensational statement that organised gangster “ racketeers ” were operating in Melbourne’s tobacco “ war ” was made recently by the acting president of the Retail Tobacconists’ Association, Mr K. Benjamin. Mr Benjamin based his statement on information given to the Retail Tobacconists’ Association and on his own experience and that of other members of the association. Recent reports, he said, confirmed suspicions which had existed among retailers for some time, that organised .gangs were at the root of the tobacco war. “ I am in a position to state quite definitely that the retail tobacco trade is at the mercy of criminal gangsters.” he said. “ The theft and distribution of stolen tobacco is a highly organised and profitable business, of a type which would do credit to any Chicago gang. I estimate that the two or three gang leaders are drawing well over £IOO a week from the trade in stolen tobacco. For a long time the thefts averaged £3OO a week. Leaders Lie Low. “ The leaders of these gangs are men who have money behind them. In addition there are a number of smaller bands engaged in petty thieving. The big men never take any hand ir the actual robberies, figure in the disposal of the stuff or reveal their identity to any but a few close associates. They buy their stolen supplies from their gangs of thieves, paying them only about £5 for stuff worth £IOO retail. They either distribute it themselves through dummy firms, or send large parcels of it to Sydney for disposal there. In return they receive from Sydney an equal quantity of stolen tobacco, covered l.y fake invoices.

“ One of the gangs distributes in Melbourne at cut prices, relying for its profit on the inclusion of £lO or £2O worth of stolen tobacco in every order it receives, buying the remaining £BO

or £9O worth from wholesalers in the legitimate way. Another gang has its own shops registered under dummy names. In each of these shops the gang used to place from £lO to £2O worth of its stolen tobacco a week. This stolen stuff represented a clear profit of from £lO to £2O. Therefore the rest of the tobacco sold could be cleared at prices cut to a level just sufficient to clear rent, wages and other overhead. Practising Blackmail. “The smaller gangs had no difficulty in disposing of their tobacco at half the retail price to unscrupulous letailers, especially if those retailers were on the wholesalers’ ‘ black list ’ because of their price cutting. Now that no ‘ black list ’ exists because of the breakdown of the w’holesale distributors' organisation, these small gangs are having a lean time. In the past they have practised blackmail, and are probably resorting to it again. In addition, they are quite openly hawking tobacco and cigarettes round the city at less than the manufacturers’ prices. “In one instance in town where a tobacconist transferred his patronage from one gang to another, the gang that lost his trade threatened him. When he refused to buy further from them they robbed his shop. “ The police are doing their best, but they can only catch the thieves while actually committing the shopbreaking. “ The only way to give permanent security to the trade would be for the Government to fix the price for cigarettes and tobacco. A fixed price would practically eliminate racketeering at once, because it would prevent receiving shops from obtaining a large turnover by cutting prices.”