Tobacco racket. Swedes go smoke-free while Australians light up with criminals
Australia’s smoke reduction policies have failed to reduce smoking while fueling the black market and delivering a massive reduction in tobacco excise duty. criminologist James Martin On how Sweden is leading the way.
This week Australian Bureau of Statistics (ABS) clarified It is stated that a staggering 80% of cigarettes sold in Australia by December 2025 will be sold through illegal channels. The debris surrounding the black market is sadly familiar: tens of billions of dollars in excise taxes forgone, early signs that we may be facing the first surge in cigarette consumption since the 1990s, and a sustained wave of violence that has led to more than 280 firebombs, along with murders, kidnappings, and extortion.
In Sweden, it’s a quieter landmark. The daily smoking rate has fallen to 4.8% of the population; This falls below the 5% threshold at which a country is officially considered “smoking-free”. Sweden is now the first Western country to reach this point, and one of the few countries anywhere in the world.
Australia, for all its proclaimed world-leading status, is no longer in this company.
Australian approach
Much of Australia’s tobacco control strategy over the last 15 years has focused on punishing the legal industry. The idea that the best policies are those the industry hates the most is summed up in the so-called “scream test.” This includes plain packaging, illustrated health warnings and, best of all, currently the highest tax in the world.
However, the tax is not imposed only on tobacco companies; It also falls on people who smoke. An Australian with a daily pack habit who wants to buy legal cigarettes now faces an annual bill of over $15,000. And because smoking is concentrated among disadvantaged groups (First Nations Australians, the poor, the mentally ill),
Those most affected are the least wealthy.
Advocates of higher tobacco taxes have an answer. They suggest that disadvantaged smokers are more price sensitive and therefore more likely to be forced to quit than more affluent smokers who can afford the cost.
But the evidence points in the opposite direction.
The biggest decline in smoking rates in Australia has been seen among higher socio-economic groups, while those at the bottom continue to smoke at stubbornly high rates, sometimes foregoing food or other essentials to do so. For those who cannot or will not give up, high taxes intensify the damage rather than reducing it, adding financial ruin to the risks of disease and premature death.
Of course, leaving an ever-larger share of spendable money in the federal coffers is not the only option available to smokers, and therein lies the fundamental error: Restricting legal supply does not eliminate demand. It directs him to actors even less conscientious than tobacco companies: organized crime.
In Australia, most tobacco is now sold by criminals at well below the legal price.
We are creating one of the largest black markets in our nation’s history.
According to the government’s own figures, Australians now spend more than $7 billion a year on illicit nicotine; This figure is more than marijuana, cocaine, heroin and ecstasy combined. Competition between gangsters in pursuit of these enormous profits is the reason why Australia’s suburbs have seen burnt storefronts and serious violence; This is reminiscent of Al Capone and America’s failed experiment with alcohol prohibition a century ago.
With illegal retailers opening faster than they are closing, hundreds of millions in additional funding for law enforcement have so far failed to reverse this trend. The police told us we couldn’t arrest our way out of this problem. Their perspective is supported by criminological research showing that illicit markets of this size and profitability are extraordinarily adaptable and resistant to law enforcement.
The ringleader of the illegal tobacco trade was arrested. Long live the king tobacco
Swedish approach
Sweden made a different choice and based its policy on harm reduction rather than coercion. It is said that smokers come for the nicotine but die because of the tar; So Swedish policymakers made peace with less harmful ways of delivering nicotine: snus, its modern successor, nicotine pouches, and e-cigarettes. Sweden also taxes cigarettes, but not at our level. The cost of a pack is less than a third of what is sold here, similar to what the black market sells for in Australia.
And yet Swedes are quitting in droves as demand shifts from deadly cigarettes to less harmful alternatives. This should give pause to the tax and penalty school because it challenges the basic assumption of contemporary Australian tobacco control: that prohibitively high prices and other onerous restrictions are necessary to induce people to give up.
Instead of making far more dangerous ones disruptive, Sweden made less risky options attractive and accessible, and it worked. While Sweden’s nicotine consumption remains at the same level as the EU,
Swedes now have the lowest tobacco-related disease and death rates in Europe.
Vape paradox
Nowhere is the tension between naivety and pragmatism clearer than in the contemporary e-cigarette debate. Australia was one of the early pioneers of harm reduction and has been considered a pillar of Australian drug policy since the 1980s. But in tobacco control circles, “harm reduction” is seen as code for industry takeover.
E-cigarettes are not risk-free like snus and nicotine vapes, but the evidence is overwhelming that they are much less harmful than cigarettes.
The government tacitly admits as much: Since 2024, smokers can legally purchase a limited number of unpopular e-cigarettes from pharmacies, on the rationale that they are a legitimate way to stay away from cigarettes. But the model failed on its own terms; Less than 5% of Australian vapers shop at pharmacies. The rest are sold without consumer protection or age restrictions, with nicotine levels far above those sold in legal markets, and by the same criminal groups currently firebombing across the country.
What sustains our prohibitionist model is a constant panic about children. No one in their right mind would want children taking nicotine, but the moral panic in Australia has outgrown the evidence. The “gateway” theory that e-cigarettes encourage the next generation to smoke has not survived contact with the data. all over the world,
In places where e-cigarettes were legal, the biggest decline in smoking rates was seen in the groups that used the highest number of e-cigarettes.
The tobacco industry, on the other hand, came late to less harmful nicotine products and now understands, at least in the West, that its future lies in selling smokeless nicotine.
This change should be welcomed, albeit cautiously and with a close look at corporate behavior. The alternative to rejecting safer nicotine products simply because the legal industry profits from them is to abandon nicotine consumers, who are disproportionately some of our most vulnerable citizens, to premature disease and death, which is an abhorrent moral calculation.
Nicotine is the 3rd most popular recreational drug in the country, after caffeine and alcohol, and is used regularly by millions of Australians. We can’t pass even more restrictive laws and expect them to go away.
Budget boon for tobacco pirates as police lose war against cartels
James Martin is Associate Professor of Criminology at Deakin University. His main research interests relate to illicit markets and cybercrime. It has never accepted funds from the tobacco or nicotine industries. James holds a pro bono consultancy role with the not-for-profit organization Harm Reduction Australia.
