What Lies Behind Melbourne’s Rash of Firebombings?

Melbourne has witnessed at least 106 firebombings since March 2023, and the attacks have escalated since the end of a turf war between a Middle East-based standover merchant and a prominent local crime family for control of Australia’s illicit tobacco market.

That turf war apparently ended nine months ago when the Haddarra Family lost out to Kazam Hamad, who was named as the boss of an extortion racket – after a suppression order was lifted in December – that has challenged Melbourne’s ranking among the world’s most liveable cities.

An Iraqi who arrived in Australia as a refugee, Hamad was deported in 2023 after serving an eight-year prison sentence for heroin trafficking.

Since then, he has allegedly overseen the smuggling of authentic foreign cigarette brands and counterfeit cigarettes into the country from his base in Dubai. The illicit cigarette shipments are hidden in the back shipping containers and are sold under the counter in Melbourne, primarily in the city’s tobacco shops.

If a tobacconist refuses to handle Hamad’s stock, sources say, an encrypted contract is offered online. This is taken up by teenage or motorcycle gangs who then confront store owners with a death threat and if the owners refuse to comply, the shop is firebombed in the dead of night.

So far there have not been any human casualties reported from the bombings but two execution-style murders in August and October of last year have been linked to the tobacco wars by investigating police.

A government crackdown has been initiated and police have conducted routine raids but business owners are frightened and each bombing serves as a reminder to the thousands of other tobacconists of the realities of not doing business with organized crime.

At the heart of the issue, however, are Australia’s tobacco taxes, which at 65 percent through a variety of state and federal levies, are among the highest in the world, with the Victorian state government arguing that higher costs are encouraging smokers to quit.

In Melbourne, a pack of 20 Marlboro Gold, perhaps the world’s best-known brand, sells legally for US$38 when the same packet – smuggled and tax free – costs about $11 under the counter.

A Victoria state parliamentary inquiry found that a pack a day smoker was expected to legally pay $14,797 a year for a habit few people can afford. That compares with $2,994 when purchased illegally. It also said illicit tobacco sales now account for 28.6 percent of total tobacco consumption.

Authorities say illicit cigarettes are smuggled in from the United Arab Emirates, China, and Southeast Asia with border forces seizing 1.8 billion cigarettes in 2023. But they complain that they can only check one percent of the 3.2 million containers that pass through Melbourne’s ports each year. On the streets it’s a different story, and one that harks back to the Prohibition in the United States in the 1920s and early 1930s, which spawned a massive black market for cheap beer and moonshine whiskey, enabling organized crime and allowing it to flourish for decades after the end of Prohibition in 1933.

In Australia, dodgy tobacconists have disguised their store fronts as American candy shops with research showing that 88 percent of those stores are selling confectionary and contraband – such as illegal cigarettes, vapes, nicotine pouches, and drug paraphernalia – within 1 kilometer of a school.

Most shop owners and staffers were reluctant to talk about the hazards of their business.

But from behind the counter, one seller said illicit cigarettes were only sold after 5 p.m. to avoid police raids, which to date have only been staged during daylight hours.

Another said: “Shops only keep a small amount of stock so if they [the police] take it they only get a small amount.”

At Harry’s Mart, on busy Chapel Street in the upmarket suburb of Prahran, The Diplomat was given a view from behind the curtain of a wide range of black-market goods for sale.

Shortly afterwards, at 4 a.m. on June 6, Harry’s Mart was engulfed in flames with police saying they were investigating the suspected firebombing of a “convenience” store. To date, no one has been held responsible.

Investigating sources also told The Diplomat that gyms, barber shops, and general stores locally known as milk bars were also suspected of selling or being coerced into stocking contraband and had been targeted.

Just this month, a suburban milk bar was razed and two people rescued from a neighboring upstairs apartment, while in Geelong, 75 kilometers southwest of Melbourne, a convenience store was firebombed twice over the November 9-10 weekend.

Critics argue that governments – state and federal – need a reasonable and affordable approach to tobacco taxes, otherwise organized crime will continue to flourish just as it did in the U.S. under Prohibition. They say that it’s simply a matter of time before innocent people are killed or maimed.

But a more moderate approach from the Australian “nanny state,” as some critics refer to it, appears unlikely given federal taxes on cigarettes are set to rise a further 10 percent over the next two years.