The boss of IGA is calling on federal and state governments to do more when it comes to stopping the trade of illicit tobacco.

It comes after the supermarket chain recorded a loss of $150 million in legal cigarette sales over the last three years. 

“The bad guys are winning, it’s the wrong end of town that’s making all this money illegally,” IGA chief executive Fred Harrison said.

IGA also found that every customer who came in to buy a packet of cigarettes spent on average $25 on other groceries, such as bread and milk, representing an additional $30 million in lost revenue over the same period.

As a result, the chain has been forced to cut staff and reduce its wage bill by $15 million over the same period. 

“That’s a lot of people to be reducing from your workload basically because we are getting beaten by illegal operators,” Harrison said.

“Until the governments get serious and address the issue this is just going to grow and grow and grow.”

The supermarket giants have also seen a decline in cigarette sales – Woolworths reported a loss of 19 per cent year-on-year.

Victorian Premier Jacinta Allan said there was “a huge amount of work” going on to stop the illicit tobacco trade.

Independent supermarket owners say the federal government needs to stop tax increases on tobacco to reduce the gap between legal and illegal products, although this has been refuted by anti-smoking groups.