MELBOURNE - In light of increased cigarette tax increases, Australian smokers have turned to illegal smokes to fuel their habit, costing convenience stores up to 10 percent of their business, the Herald Sun reports.

As a result, the Australian Association of Convenience Stores (AACS) has warned that the well-intentioned taxes ?" reducing the smoking rate ?" have backfired.

A report released earlier this week revealed that $1.1 billion in excise taxes were being avoided as a result of illegal cigarette sales, details that the AACS included in its State of the Industry Report.

The report also notes a 40 percent increase in gas-only sales, which means 55 percent of Australian consumers who frequent a convenience store do so with the sole purpose of purchasing fuel, thus avoiding discretionary purchases.

AACS CEO Sheryle Moon said convenience store owners are concerned about the easy access to illegal cigarettes in the country.

"After all, the convenience store sector, as a big part of the small business sector, is a major contributor of government revenues, from taxes paid on purchases to income and company taxes for the many people employed in the sector," she said.