Tests were undertaken by Sharp and Howells, a Melbourne-based chemical laboratory, on four samples of illegal tobacco sourced from Warrnambool, Colac, Hamilton and Portland.

This followed an investigation by The Standard into the south-west Victorian chop-chop market, which found residents could easily purchase 100 illegal cigarettes for just $40.

Visual and microscopic examination found one sample was contaminated with bird feathers. And the founder of the ABF's tobacco strike team, Rohan Pike, said he found the results unsurprising.

"There is no quality control on the contents of the cigarettes in terms of contaminants," he told The Standard.

"The results confirm the danger to the public in consuming this illegal product of unknown origin. Bird feathers may suggest they are produced in a chicken coup which would fit with a large shed or warehouse required to store, cut and process tobacco. The problem is not confined to south-west Victoria, however. It is widespread across all regional areas."

The tobacco could be grown in Australia or imported in dry leaf form, before being cut into either a fine or course tobacco product, according to Mr Pike.

And where this would in the past be sold as "chop-chop" by the bagful, Mr Pike said the process had been "refined" to the point criminals could now primarily produce manufactured cigarettes by the boxful.

"They would only be concerned with the taste so that customers would return," he said.

"The result is that there are hundreds of thousands of Australians consuming a product without any idea what is in it. They are, effectively, leaving their health in the hands of organised criminals."

It is illegal to grow tobacco in Australia without the appropriate excise license and there have been no licensed tobacco growers or manufacturers in the country since 2006.

While much of the illegal trade prior to 2006 was sourced from diverted tobacco grown on licensed farms, Mr Pike said, production did not cease when licenses were wound up, meaning the black market has likely existed for decades.

But Mr Pike said the illegal trade had "grown in direct proportion to the increase in tobacco taxes".

The federal government jacked the average cost of a cigarette to more than 90 cents on September 1 and will tack on another 12.5 per cent increase on the same date next year, meaning legal consumers will be charged more than $1 per smoke.

This continues a trend that has seen cigarette prices skyrocket throughout the 2010s. A cigarette cost less than 30 cents at the start of the decade and less than 40 cents until December 1, 2013.

"The cost of cigarettes in Australia, now the highest in the world, has incentivised consumers to seek cheaper alternatives and organised criminals have stepped up to meet that demand," Mr Pike said.

"The problem is a health issue, it is a funding source for organised crime and it is tax avoidance on a grand scale," Mr Pike said.

"State authorities need to understand that although the taxes levied are through federal legislation, the consequences of those high taxes are felt at the state level.

"Currently, criminal syndicates can set up shops in every country town and quite openly sell this illegal product. Legislation needs to be created to stop this distribution process and appropriately resourced and trained agencies asked to enforce it."

Penalties for selling illegal smokes quadrupled in 2014. Individuals face fines of $34,600 and businesses $173,200. South-west police say they will act on information when it comes to illicit tobacco.

But Senior Sergeant Chris Asenjo earlier this year said Victoria Police also faced difficulties in the fight against the trade.

"When it comes to tobacco jobs, to be frank, at times we don't have the resources to allocate to that," he said. "We would like to see a little more of a collegiate approach with our other government agencies, but we're all busy trying to do what we can.

"You need quite a bit of evidence to get a search warrant issued by a court and we're not in the business of putting up affidavits to the magistrates court that are going to get knocked back.

"Rest assured though, we act on all our information."

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