Urgent action needed to protect Victorians from illicit alcohol
Updated: Aug 19
Key takeaways
> Illicit alcohol products are often unsafe to consume, with the potential to cause death or serious injury, yet are on the shelves of retailers across Victoria.
> Victoria currently lacks the people power and data tools to effectively detect illicit alcohol being sold in licensed venues or at packaged liquor outlets, and in cases where it has found operators acting unlawfully, penalties have been minor.
> To protect Victorians from illicit alcohol, greater investment in compliance officers and data collection and monitoring is needed, coupled with the deterrent effect of strengthened penalties.
Dangerous illicit alcohol is on the rise
Illicit alcohol products, which avoid taxation, have been found in Victorian bottle shops.¹ This includes regular drinking spirits that have been mixed with denatured alcohol, containing chemicals not fit for human consumption. Indeed, the Australian Taxation Office (ATO) estimates almost $800 million in lost tax revenue each year due to the illicit alcohol market,² a likely underestimate³ that doesn’t even capture the cost of the harms caused.
In 2024, Victoria Police and the ATO uncovered a major illicit alcohol operation valued at one billion dollars, which was supplying illicit alcohol to 80+ licensed premises across the state over the course of two years.⁴ In 2025, it was confirmed that suspected illicit, contaminated alcohol was being sold at Victorian packaged liquor outlets.⁵ Since April 2026 licensed venues across Melbourne have experienced a spate of firebombings, with Victoria Police indicating they believe these attacks may be linked to the illicit alcohol trade.⁶ Given these incidents, which have the potential to cause death and serious injury, responding to the illicit alcohol trade must be a priority for all relevant stakeholders.
Underinvestment in compliance and deterrence drives illicit alcohol market
The use of compliance inspectors has proven helpful in controlling the illicit tobacco trade in Queensland, where Queensland Health employs 138 Environmental Health Officers,⁷ with funding for an additional 40 announced in mid-2025.⁸ These staff are authorised to enforce the state’s tobacco laws and have closed down 199 illicit tobacco retailers since November 2025.⁹ While Liquor Control Victoria performs well within its budget constraints, current resourcing does not enable it to conduct similarly large-scale compliance operations to detect when illicit alcohol is being sold in packaged liquor outlets or licensed venues. Safe Food Victoria should likewise benefit from additional resourcing to support compliance.¹⁰
While testing and inspection can detect illicit alcohol at packaged liquor outlets and licensed venues, it can also be identified through the use of wholesale and retail sales data. Victorian liquor licensees are already obligated by law to keep a record of sales and purchases of liquor for 5 years,¹¹ while the Australian Taxation Office requires alcohol excise licence holders to keep records of sales.¹² Discrepancies between retail sale and wholesale numbers can indicate where illicit alcohol is entering the market at the retail level. Retail pricing data can also be used to indicate where products are being sold at an extremely low price – suggesting the required taxes may not have been paid. While some historic Victorian wholesaler data is available online, they are not routinely collected and compliance is not enforced.¹³
A strengthened, data-driven response to illicit alcohol
To ensure Victorians are protected from the dangers associated with illicit alcohol, greater investment in intelligence gathering and compliance is needed. This includes detailed data collection and monitoring through wholesale and retail data tools that will allow for targeted investigations. Independent research has shown the feasibility of this approach in other jurisdictions,¹⁴ which can be complemented by the use of price scraping tools applied to online alcohol sales.¹⁵ But data alone is not enough, we also need sufficient investment in Liquor Control Victoria’s and Safe Food Victoria’s compliance teams, and Victoria Police, to ensure strong enforcement of Victoria's liquor, food safety, and criminal laws as they relate to alcohol. This should be coupled with strengthened penalties related to the manufacture, distribution, sale and supply of illicit alcohol.
Recommendations
Invest in tools to collect and monitor wholesale and retail alcohol sales and pricing data to support targeted investigations into the manufacture, distribution, and sale of illicit alcohol.
Increase investment to bolster Liquor Control Victoria, Safe Food Victoria, and Victoria Police’s capacity to conduct compliance and enforcement activities.
Strengthen legal penalties for the illicit manufacturing, distribution, sale and supply of illicit alcohol, including but not limited to temporary cessation of business.
References
1 Michala Kowalski et al, ‘Illicit Alcohol in Victorian Off-Licence Retailers: A Preliminary Observational Study’ (2026) 45(4) Drug and Alcohol Review e70167.
2 ‘Latest Estimate and Trends for the Alcohol Tax Gap’, Australian Taxation Office (Web Page, 3 November 2025) <https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/tax-gap/a-h-tax-gaps/alcohol-tax-gap/latest-estimate-and-trends>.
3 For example, estimates of lost tax revenue due to illicit tobacco were retrospectively found to be 3 times smaller than the actual illicit market. Luke Kinsella, ‘450 Elephants: The Scale of Government’s Illicit Tobacco Problem’, Australian Financial Review (online, 12 December 2025) <https://www.afr.com/policy/economy/450-elephants-the-scale-of-government-s-illicit-tobacco-problem-20251212-p5nn3z>.
4 John Silvester, ‘Fake Booze: ‘It’s Scary and the Public Needs to be Warned’’, The Age (online, 27 April 2024) <https://www.theage.com.au/national/victoria/fake-booze-it-s-scary-and-the-public-needs-to-be-warned-20240425-p5fmjg.html>
5 Kowalski et al (n 1).
6 Johanna Marie, Vanessa Jarrett and Georgia Loney, ‘Melbourne Club Operators in Fear of Threatening Texts, Kidnappings and Arson Attacks’, ABC News (online, 5 May 2026) <https://www.abc.net.au/news/2026-05-05/threatening-sms-fire-bombings-llicit-alcohol-melbourne-pub-wars/106644480>; Jacinta Allan, ‘Eyes On The City For Organised Crime Crackdown’ (Media Release, Victorian Government, 12 May 2026) <https://www.premier.vic.gov.au/eyes-city-organised-crime-crackdown>.
7 Health and Environment Committee, Information on Queensland Health Authorised Officers (Information Request, 2023 <https://documents.parliament.qld.gov.au/com/HEC-B5E1/TOSPAB2023-4AF4/Attachment%206.%20Information%20on%20Queensland%20Health%20authorised%20officers.pdf>.
8 Tim Nicholls, ‘Big Budget Boost for Illicit Tobacco and Vape Enforcement’ (Media Release, Queensland Government, 27 June 2025) <https://statements.qld.gov.au/statements/102914>.
9 Andreas Nicola, ‘Queensland Shuts Down 200 Illegal Tobacco Shops in Statewide Crackdown’, The Courier Mail (online, 15 February 2026)<https://www.couriermail.com.au/truecrimeaustralia/police-courts-qld/queensland-shuts-down-200-illegal-tobacco-shops-in-statewide-crackdown/news-story/983c27d816f1eb8e534acba7a3584aee>.
10 Food Act 1984 (Vic) s 16.
11 Liquor Control Reform Act 1998 (Vic) s 179.
12 ‘Record Keeping as an Excise Licence Holder’, Australian Taxation Office (Web Page, 8 September 2023) <https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/excise-on-alcohol/record-keeping-for-excisable-alcohol/record-keeping-as-an-excise-licence-holder>.
13 ‘Victorian Wholesale Liquor Sales’, Data Vic (Web Page, 19 December 2024) <https://discover.data.vic.gov.au/dataset/victorian-wholesale-liquor-sales>.
14 Nicholas Taylor et al, ‘The Impact of a Minimum Unit Price on Wholesale Alcohol Supply Trends in the Northern Territory, Australia’ (2021) 45(1) Australian and New Zealand Journal of Public Health 26.
15 Tina Lam et al, ‘Leveraging Web-Scraped Data to Examine Alcohol Pricing: An Australian Feasibility Study With Retail Data’ (2026) 148 (February) International Journal of Drug Policy 1.
