Full Breakdown
Rising Insurance Barriers for Australian Small Businesses Near Tobacco Shops
By Drooid · · How we work
Core Event: Melbourne Firebombing Spurs Insurance Denial
A firebombing in Melbourne’s Richmond suburb destroyed a tobacco retailer and damaged nearly a dozen adjacent shops, prompting a response from 80 firefighters. In the aftermath, insurers have begun refusing to renew or to offer new policies to businesses located within roughly 20 metres of a tobacconist, citing heightened fire-risk exposure. A retailer who asked to remain anonymous confirmed that their insurer declined renewal solely because the shop sits “a few doors down” from a tobacconist.
Background & Context: Illicit Tobacco Market Fuels Violence
Government data link the surge in arson attacks to rival crime syndicates battling for control of Australia’s illicit tobacco market. Since 2023, more than 200 commercial and residential premises have been firebombed nationwide. The Australian Bureau of Statistics reports that illicit cigarettes comprised 80 % of all cigarettes smoked in 2025, with untaxed packets selling for about $10 compared with over $40 for legal packs. The profitability of the illegal trade is driving syndicates to target legitimate tobacconists, creating collateral risk for neighboring small businesses.
Official Statements & Responses
Skye Cappuccio, chief executive of the Council of Small Business Organisations Australia, warned that “small businesses should not be left carrying the financial consequences of criminal activity that is beyond their control,” urging coordinated action from government, law-enforcement and regulators. A spokesperson for Suncorp confirmed the insurer no longer offers coverage to tobacconist retailers, including renewals, but noted that businesses near tobacconists may still be eligible on a case-by-case basis. Similarly, a QBE spokesperson said underwriting decisions are assessed individually, with risk profile changes influencing price, terms or availability of cover.
Data & Statistics
- >200 firebombings of commercial/residential sites since 2023.
- 80 firefighters deployed to contain the Richmond blaze.
- Insurers typically define “close proximity” as within ~20 metres of a tobacconist.
- Illicit tobacco accounted for 80 % of Australian cigarette consumption in 2025.
- Untaxed cigarettes: ? $10 per pack; legal cigarettes: > $40 per pack.
Verbatim Quotes
- “Small businesses should not be left carrying the financial consequences of criminal activity that is beyond their control,” — Skye Cappuccio, the chief executive of the Council of Small Business Organisations Australia