Key facts
- Businesses near tobacconists in Melbourne are being denied insurance or facing higher premiums due to arson attacks.
- Insurers like Suncorp have stopped offering coverage for tobacconist retailers.
- Crime syndicates are linked to over 200 firebombings in Australia since 2023, vying for control of the illicit tobacco market.
- Illicit tobacco accounted for 80% of cigarettes smoked in Australia in 2025.
- Brokers generally consider businesses within 20 meters of a tobacconist to be in close proximity for insurance risk assessment.
Small businesses in Melbourne are facing significant challenges in securing insurance coverage as a wave of arson attacks targeting tobacconists escalates, impacting neighboring establishments. These firebombings, often linked to criminal syndicates vying for control of the illicit tobacco market, are causing collateral damage to legitimate businesses.
One Melbourne retailer, who wished to remain anonymous, reported their insurer refused to renew their policy due to their proximity to a tobacconist, describing the situation as being "a few doors down." The retailer also noted that other insurers were providing quotes that excluded fire cover.
Legitimate tobacconists themselves are also reportedly facing difficulties obtaining insurance as syndicates expand their operations. According to data from the Australian Criminal Intelligence Commission, crime syndicates have been involved in over 200 firebombings across Australia since 2023. A recent incident in Richmond, Melbourne, saw 80 firefighters battle a blaze that destroyed a tobacco retailer and nearly a dozen adjacent shops.
Skye Cappuccio, chief executive of the Council of Small Business Organisations Australia, stated that businesses should not bear the financial burden of criminal activities beyond their control and called for a coordinated effort from government, law enforcement, and regulators to address both the illicit tobacco market and rising insurance costs.
Insurers like Suncorp have confirmed they no longer offer insurance for tobacconist retailers, including renewals. However, they indicated that businesses located near tobacconists might still be eligible, with underwriting decisions made on a case-by-case basis considering various risk factors. QBE also stated that risk profiles are assessed individually, influencing the price, terms, or availability of cover.