Here is another report that many of you may find interesting. I know newsagents who's tobacco business has been ruined by this illicit trade. However looking at this report it accuses some newsagents of being actively involved in the trade.
Current estimates is that the illicit tobacco market in Australia in 2011 is about 13.4% of the legal tobacco market. This illicit trade is moving from unbranded tobacco often sold by weight to packaged. The advantage to these traders I am sure is that it can be sold without the buyer knowing they are buying illegal tobacco so increasing the market potential and profits of the dealers further.
I have no doubt what the big reason is for this illicit trade, the government is too greedy. Illicit tobacco is a quarter of the price, the 75% is all tax.