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Can You Grow Tobacco in Australia? What License Do You Need?

Yes, you can grow tobacco in Australia, but you will need an Excise – Producers Licence. It is illegal to grow tobacco in Australia without the appropriate excise licence. There have been no licensed tobacco growers or manufacturers in Australia since 2006.

Howbeit, organised crime syndicates have continued to orchestrate these growing operations, sometimes by targeting unsuspecting landowners, by trying to lease land to grow illicit tobacco. These operations are not run by genuine farmers or landowners, but by criminals living and operating in local communities.

Organised criminals who deal in illicit tobacco rob the Australian community of valuable revenue, instead they use their profits to fund their lavish lifestyles and also continually engage in criminal behaviour well beyond the sale of illegal tobacco.

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According to reports, tobacco growing in the country commenced during Australia’s early years of settlement. Governor Macquarie experimented with plantings at Emu Plains in New South Wales in 1818, and by the 1820s tobacco was cultivated by farmers in the Hunter Valley. During the 1850s, growing extended to Victoria and Queensland.

Note that it is likely that some proportion of the early crop was intended to supply the colony with pesticide for use in ridding sheep of parasites. Growing reached its peak in the early 1970s when nearly 16,000 tonnes of leaf were sold annually, but by 2006 the crop yielded under 4,000 tonnes. Before the deregulation of the market, most Australian leaf was purchased by local manufacturers.

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Engaging in illicit tobacco trade is a serious offence in Australia. It significantly deprives the Australian community of vital funding which could have otherwise been used to fund essential community services such as hospitals, schools and roads.

The illicit tobacco trade includes but is not limited to the unlicensed production of tobacco plant or leaf and the unlicensed manufacture of tobacco products. Illicit tobacco may include cigarettes, cigars and loose tobacco (also known as ‘chop-chop’), and tobacco leaf and plant matter.

Have it in mind that tobacco is considered illicit in Australia when it is grown, manufactured and/or produced in Australia without an appropriate excise licence, even if the tobacco is intended for personal use, or even when it is imported into the domestic market without customs duty being paid.

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As at 16 August 2018, the government passed the Treasury Laws Amendment (Illicit Tobacco Offences) Bill External Link which creates a new tobacco offence regime. The tax laws increased the set penalties to a level that provides greater deterrence to illegal activity. The penalty amount is calculated in multiples of the penalty unit. If the infringement occurred on or after 1 July 2017, the penalty unit amount is $210.

About the Excise – Producers Licence (Tobacco) 

Have it in mind that you will require this licence if you intend to grow and produce tobacco seed, tobacco plant or tobacco leaf. If you plan to manufacture tobacco products, such as cigarettes and cigars, from materials you grow, you will also need a manufacturers licence.

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If you intend to sell your tobacco seed, tobacco plant or tobacco leaf to a licensed manufacturer of tobacco products, then you will also require a dealer’s licence (tobacco). Note that all tobacco grown (whether for personal or commercial use) and consumed in Australia is subject to excise duty.

Eligibility Requirements

First and foremost, it is imperative to note that licences to grow tobacco in Australia are rarely granted. There are no current licences for personal or commercial tobacco growing in Australia. However, if you apply for a licence, the Agency will consider factors such as:

  • The physical security of the premises
  • The protection of the revenue
  • If there is a market for the goods.
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As of 2008, cigarette companies reported that most tobacco leaf used in Australian-made cigarettes was grown in the US, Brazil, Zimbabwe and India. No more recent information could be located about the source of tobacco used in cigarettes sold in Australia. Nonetheless, it is still illegal to grow tobacco in Australia without the appropriate excise licence. There have been no licensed tobacco growers or manufacturers in Australia since 2006.