Philip Morris uses secret Senate hearing to warn illegal tobacco in Australia could wipe out legal trade by 2030

Tobacco giant Philip Morris told a secret Senate hearing that soaring trade in illegal cigarettes would wipe out legal products in Australia as soon as 2030, claiming executives’ identities should be kept secret because of threats from organised crime.

Labor criticised Coalition MPs for allowing the company to give evidence to an inquiry on illegal tobacco in a closed-door session in Canberra on Monday, ending more than 15 years of precedent under a World Health Organization (WHO) agreement.

Australia is a signatory to the WHO framework convention on tobacco control, which is designed to stop interference in public health policy from cigarette manufacturers. It calls for transparency around evidence from tobacco companies when required in decision-making.

Guardian Australia can reveal the evidence – delivered in a private “in camera” session – included dire warnings about the rise of illegal and unregulated tobacco products and the risk that some multinational manufacturers could exit the Australian market due to declining legal sales.

The federal government’s illicit tobacco and e-cigarette commissioner has told the inquiry that illegal tobacco sales account for between 50% and 60% of the Australian tobacco market today. Those sales are worth as much as $6.9bn.

Executives are understood to have argued lowering federal tobacco excise would undercut hidden market operators.

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Anti-smoking campaigners, the Greens and the federal government all criticised the committee chair and South Australian Liberal senator, Leah Blyth, for facilitating the private hearing this week.

The company made a public submission to the inquiry but was not included on published programs. Efforts by Guardian Australia to seek responses about the hearing went unanswered.

It emerged on Tuesday that Philip Morris employees gave evidence “in camera” to a NSW parliamentary inquiry into the illegal tobacco trade in February. A transcript of that hearing shows three unnamed witnesses employed by the company answered questions in the inquiry chaired by Shooters, Fishers and Farmers party member Robert Borsak.

The federal customs minister, Julian Hill, said tobacco manufacturers had failed to answer questions from the government’s illicit tobacco commissioner about commercial data and supply chains.

“Big tobacco has been caught out globally over decades for selling their surplus production into illegal markets on the side, and Australians deserve transparency and proof that big tobacco are not complicit in illicit tobacco in our country,” he said on Tuesday.

“Australia will not get into a bidding war with organised crime on the price of tobacco or surrender our health policy.”

The health minister, Mark Butler, wrote to Blyth and other MPs ahead of this week’s hearing, reminding them of the WHO guidance agreement and health department guidance on engagement with tobacco manufacturers.

He urged MPs from all parties to stick to the WHO agreement, first signed by the Howard government in 2004.

“We think, particularly if industry is giving evidence about ways in which public decisions will impact their profits, that they should be answerable for that evidence,” he said.

The Cancer Council and the Australian Council on Smoking and Health were scathing on the secrecy.

Heart Foundation chief medical adviser, Prof Garry Jennings, said the committee had “invited the enemy into the war room”.

“Big tobacco will simply argue for a reduction in excise so it can sell more cigarettes legally,” he said.

“It has no interest in public health or safety, which is what this nuanced discussion is about. But disappointingly, we have no way of knowing what they discussed with the committee.”

He said the rise in illegal tobacco sales was concerning, and should be dealt with through better detection and enforcement.

Lung Foundation Australia chief executive, Mark Brooke, said it was concerning the evidence had been heard in secret.

“Transparency must be non-negotiable,” he said.

“Our position is clear. We need stronger enforcement, tougher penalties, and decisive action to shut down illegal operators, not secrecy.”