A packet of cigarettes can cost as little as 20¢ in China and a shipping container load costing $200,000 in Asia can make $4-$5 million for smugglers in Australia, according to the tobacco industry. Illicit cigarettes purchased in a Melbourne suburb. Credit:Michael Clayton-Jones The government acknowledged the threat of black market cigarettes in the budget, with a $8 million to expand the "tobacco strike team" operated by the Department of Immigration and Border Protection. Offences under the Customs Act and Excise Act will also be strengthened. At $40 a pack, tobacco by weight is heading towards being a comparable cost to illicit substances such as marijuana.

A single cigarette, which will cost nearly $2 by 2020, contains 0.8 of a gram of tobacco. According to the "Price of Weed" website a gram of medium-strength marijuana can be bought for $15 in Sydney and $12 in Melbourne. On that basis a, rolled joint costs roughly $5. Border Force has made 91 seizures of illicit tobacco over the past 12 months and on Thursday the strike team announced it had seized another 13 million smuggled cigarettes and more than eight tonnes of loose leaf tobacco. British American Tobacco alleges the government is losing more than $1 billion dollars in taxes from the illegal trade.

The company said the latest excise rise, which is being used by both sides of politics to help fund election policies, is an "over the top tax grab" that will mean eight successive annual rises in excise. "A further round of large ad hoc tobacco excise increases must have the organised crime syndicates who smuggle large quantities of illegal tobacco into the country champing at the bit," British American Tobacco said. "If smokers are faced with a legal pack of $40 cigarettes or a $12 illegal pack it is obvious which one the majority will choose. "Currently up to 70 per cent of the price of a pack of cigarettes goes to the government in taxes, obviously organised crime don't pay their taxes hence why illegal tobacco is such a lucrative business." A Senate committee is currently looking at the effect of the illicit tobacco.

In a submission to the inquiry, the retailer Cignall, which has a franchise network of 200 tobacconists, described as "astounding" the trade in "chop chop" or illegal loose leaf tobacco and "pre-rolled tubes", which are tubes filled with illegal tobacco. "By continuing to increase the price of illegal tobacco products, you are encouraging consumers to purchase a cheaper, illegal tobacco product," Cignall claimed. The Health industry, which backs the excise increase, said the detection of smuggled tobacco should not be used as reason to weaken tobacco tax measures. The Australian Medical Association said: "It is possible that the tobacco industry wishes to amplify the size of the problem, and in turn, use it as a counterargument against tobacco control measures (such as plain packaging and continued excise increases) that seek to further reduce their market. This is not to suggest that illicit tobacco is not consumed in Australia." Loading

The government said the four annual increases will take Australia's excise on a cigarette to almost 69 per cent of the average price of a cigarette, close to the World Health Organisation recommendation of 70 per cent of the price of a cigarette. Follow us on Twitter