Cobargo Hotel licensee David Allen (left) runs the venue with Bronwyn and Jack Allen. Photo: Supplied.
Far South Coast publican David Allen is a familiar face for travellers and locals alike.
He and Bronwen Allen have been co-owners of the Cobargo Hotel since 2015, battling through the 2019 New Year’s Eve bushfires and COVID lockdowns.
But Mr Allen says there’s been another threat that’s been lurking in the background: illegal tobacco.
He says legal tobacco products, with the excise tax, are just too expensive and push people towards illegal suppliers.
“If legal tobacco was in the $25 to $30 mark, which it was around COVID, I think you would find a lot of people would gravitate back to the legal market,” he says.
“If the excise just dropped to 2019 levels and if we really stepped up our enforcement, I think that would shrink the illicit market enough.”
Other measures — such as cracking down on tobacco advertising on social media — would then be able to take a bigger bite out of the illicit trade, he says.
He says there’s a key similarity between it and the country’s illicit drug trade, with small traders and organisations operating in various locations.
It means they can easily set up shop, he says, without needing to pay the costs associated with the legal trade, such as licensing and insurance.
“We’ve got about 24 months before we’ve reached the point of no return and tobacco becomes like illicit drugs,” Mr Allen says.
“You have people selling as street dealers and [through] social media channels … That’s what the government’s going to get unless it does something pretty serious.”
Mr Allen estimates that his tobacco sales have dropped almost 80 per cent since 2019.
“We’ve lost a lot of trade, particularly since COVID, but the thing is that that trade will probably never come back,” he says.
“We’ve had to reset the business and try and do other things to make up for that shortfall … but one thing I can control is what I pay for insurance.”
Mr Allen says their insurance premium currently sits around $80,000 a year, but he had been told this could increase if he continued to sell cigarettes.
He says that while the Cobargo Hotel hasn’t been targeted, stories of alleged offending surrounding illicit tobacco are also becoming common.
“Every day there’s a drive-by shooting or a ram raid or a fire bombing,” he tells Region.
He says venues across the state are seeing their rents and other business costs increase as a result.
“We are not going to solve it by policing and compliance alone,” he says. ”We’ve got to look at excise — and that’s the issue that the politicians and the health people that advise the politicians don’t really want to see me go down that track.”
Under laws passed in November 2025, NSW Health (supported by NSW Police) can make short-term closure orders of up to 90 days for premises allegedly selling illicit tobacco, illegal vaping goods or tobacco without a licence.
But Mr Allen doesn’t feel those powers go far enough in dealing with the issue.
He says that without reform to the excise tax, he is seriously considering closing the tills — for tobacco, at least.
“If I’m not getting a decent return on that [trade], it’s a pretty easy decision for me to just walk away from it.”
If you suspect a business is doing the wrong thing, you can lodge a complaint through the complaints portal on the NSW Health website. A full list of current tobacco closures can also be found on the NSW Health website, which is updated each Friday after 3 pm and includes the alleged reasons for the closure.
