Inside Melbourne’s flourishing illegal tobacco trade

The Australian Border Force (ABF) had conceded that the nation’s illegal tobacco industry is growing, and it's largely due to international crime syndicates smuggling it here from Asia and the Middle East.

Fuelling the black market is the fact that cigarettes are so heavily taxed on our shores.

Click play on the video player to watch the exclusive report on authorities' fight against tobacco smugglers

What that attracts is crime gangs who sneak the product into the country without paying duty. Not only do they avoid taxes, but they also sell them sometimes at more than 60 times their offshore price.

Having said that, authorities are making significant headway with arrests across the country; one syndicate is accused of importing 50 million cigarettes into the country, while nother allegedly dodged $9 million in taxes with a stash imported into Melbourne.

This affects all Australians because we all foot the bill.

"There’s no denying that the availability of illegal tobacco in Australia is widespread and increasing...That revenue that's avoided is taxpayer money we're losing,” Craig Palmer from the ABF said.

Not only does this impact the individual taxpayer, it affects small business owners too.

"We've got customers coming in now where we're selling product at legal price saying 'Oh ....you're way too dear I can go down the road and get it for half that price',” CEO of Ritchies supermarkets Fred Harrison said.

“That's what demoralises us,” Mr Harrison added.

While authorities said criminals are becoming more sophisticated when it comes to concealing illegal cigarettes, they warned that police are getting much better at catching offenders.