Recent stats from the Australian Bureau of Statistics (ABS) show that nicotine use skyrocketed by nearly 40% from 2017 to 2025, despite the country rolling out tough anti-smoking measures, hefty tobacco taxes, and strict regulations on nicotine. What’s really shocking is that illicit products are now making up around 80% of all nicotine and tobacco consumed in Australia—up from just 12% eight years ago.
When the global context is considered, these figures are especially shocking. Studies reveal that illegal tobacco makes up about 11% of total use across 38 European nations. In Canada, the number shoots up to around 38%, in New Zealand to 27%. But Australia’s 80% places it in a whole different league altogether.
The consequences extend far beyond lost tax revenue. Organised crime groups have become deeply involved in Australia’s illicit tobacco trade, with law enforcement agencies reporting links to money laundering, violence, human trafficking, drug trafficking and extortion. Firebombings of tobacconists and other businesses have become increasingly common as criminal networks compete for control of the market.
More enforcement will not solve anything
Australia’s own Border Force has acknowledged that enforcement alone cannot solve the problem. In submissions to a federal inquiry examining the illicit tobacco crisis, officials warned that the illegal market has become highly resilient, adaptable and increasingly sophisticated.
Perhaps most tellingly, Australia’s own Border Force has acknowledged that enforcement alone cannot solve the problem. In submissions to a federal inquiry examining the illicit tobacco crisis, officials warned that the illegal market has become highly resilient, adaptable and increasingly sophisticated. The agency concluded that supply-side enforcement efforts are unlikely to succeed without parallel measures to reduce consumer demand.
Yet, when smokers are still hunting for their nicotine fix, and legal options are either super pricey or hard to get, they often turn to other sources. Over the last ten years, the price of legal cigarettes in Australia has skyrocketed, tripling, while illegal tobacco products remain relatively cheap. In fact, while people are consuming more nicotine, household spending on tobacco has actually dropped due to the fact that many are opting for those untaxed, illegal alternatives.
In line with this, recent studies show that younger smokers in Australia are increasingly opting for black-market products instead of quitting altogether. In fact, it turns out that nearly two-thirds of smokers aged 18 to 24 have bought illicit tobacco, highlighting just how entrenched these illegal supply chains have become in the market.
For many experts focused on reducing tobacco harm, this whole mess points to a bigger problem in policy-making: the idea that if you just keep making it harder to access safer nicotine products and jack up cigarette prices endlessly, people will eventually stop using nicotine altogether. In fact, evidence from comparable countries suggests otherwise.
Evidence of what works in plain sight
Across New Zealand, Japan, Sweden, and the United Kingdom, policymakers have incorporated tobacco harm reduction into broader smoking-reduction strategies. Rather than focusing only on prohibition and taxation, these countries provide adult smokers access to regulated smoke-free alternatives such as vapes, nicotine pouches and oral nicotine products, and the results have, of course, been beyond significant.
THR experts have been relentlessly pointing out that rather than treating all nicotine products identically, regulation should reflect relative risk. Cigarettes remain uniquely dangerous because they involve combustion, generating thousands of toxic chemicals responsible for cancer, cardiovascular disease and respiratory illness. Smoke-free alternatives eliminate combustion and substantially reduce exposure to those toxicants.
This distinction is increasingly recognised internationally.
Public Health England, the UK’s Office for Health Improvement and Disparities, the Royal College of Physicians, New Zealand health authorities, and numerous independent researchers have all concluded that smoke-free nicotine products can play an important role in reducing smoking-related harm among adults who are unable or unwilling to quit nicotine entirely.
The Australian experience also carries important lessons for policymakers elsewhere.
Across Europe and North America, governments debate flavour bans, nicotine caps, excise increases, and restrictions on smoke-free products. Australia’s illicit market explosion is a clear example of the risks of pursuing nicotine policy without fully accounting for consumer behaviour.
The consequences of ignoring consumer needs
When safer alternatives become inaccessible, unaffordable or overly regulated, many smokers do not simply stop using nicotine. Instead, they often continue smoking or seek products through unregulated markets. This reality is undeniable and increasingly sits at the heart of modern tobacco harm reduction. The goal should remain reducing smoking-related disease and premature death. Achieving it requires recognising how nicotine consumers behave in the real world rather than how policymakers wish they would.
Australia’s illicit tobacco crisis has become one of the clearest demonstrations of what does not work. As countries seek to accelerate smoking declines, the evidence from countries such as Sweden, New Zealand and the UK suggests that making lower-risk alternatives accessible, affordable and attractive achieves what prohibition never could.
Enforcement Won’t Fix It: Australia Needs to Tackle the Root Cause of its Broken Tobacco Policy
