Australia Tried To Tax Smoking Out of Existence. Now 80% of Tobacco Aussies Consume Is From the Black Market.
The Australian government has spent the last decade imposing steep tax increases to reduce smoking, and as a result the country has the most expensive cigarettes in the world. Average price mainstream cigarettes cost AU$54.99 (about $40) per pack. But the eye-watering prices drove people to the black market.
An estimated 80 per cent of tobacco consumed in Australia by 2025 was illegal, according to new analysis; This rate was 12 percent in 2017. Australian Bureau of Statistics (ABS). The study is the first initiative of the Australian government. to guess The size of the black market found that “prices of legal tobacco products have nearly tripled since December 2016 due to annual tobacco excise tax increases, but estimated prices of illegal tobacco products have remained relatively stable.” Legal household expenditure on cigarettes and tobacco has almost halved since 2020, but the amount of nicotine consumed in Australia between 2017 and 2025 has increased by almost 40 per cent.
Meanwhile, the price of legal cigarettes has nearly tripled between 2016 and 2025, while tobacco tax revenues have more than halved. As a result, the Australian Treasury has reduced tobacco excise tax revenue by $8 billion over the next five years. latest federal budget.
Low tax revenue is nothing to mourn, but Australia’s collapsing legal tobacco market has produced a much darker outcome: a serious wave of gang violence, including firebombings and shootings. Since 2023, organized crime groups linked to Australia’s illicit tobacco and vaping market have been linked to “more than 200 firebombings”, “at least 3 murders” and “numerous non-fatal violent attacks”, according to the report. Australian Intelligence Commission.
“It’s hard to see how the situation could get any worse,” says former Australian Federal Police detective and Border Force member Rohan Pike Reason. Pike, who founded and leads Australia’s Illegal Tobacco Strike Team, says the violence has now become “an old-fashioned turf war” and criminal gangs, tempted by profit, are fighting to control distribution.
Criminal groups open makeshift markets, intimidate legitimate retailers into selling their products, and back up those threats with “firebombs and other forms of violence,” Pike says. Organized crime groups destroyed hundreds of tobacconists, markets and accommodation establishments, putting legitimate businesses out of action. “Every part of tobacco control policy is currently uncontrolled,” Pike says.
Public awareness of the black market came last year when Katie Tangey, a “completely innocent” 27-year-old woman, was killed There was a case of mistaken identity in Melbourne linked to the tobacco wars. “We know this is linked to the illegal tobacco trade. That’s something we can say with a high degree of certainty,” Detective Inspector Chris Murray told the Australian Broadcasting Corporation. he said. “We always had the fear that someone would die as a result of the tobacco wars, and unfortunately that has come to fruition.”
“Unfortunately, it is no surprise to me that someone would die at the hands of individuals who use arson as a means of committing crimes,” Murray added.
While this may be a wake-up call to much of the public about the dangers of the illicit market, Pike says the crisis was already visible when he was working on tobacco enforcement at Border Force more than a decade ago. He says high taxes have given criminals a “free shot into the market” after Australia began “raising excise duty” from 2010. By 2015, his team was making arrests, but he soon realized “we weren’t going to make arrests our way out because it was too big.”
In some cases, Pike says, the problem has gotten worse: “Some of the criminals we put in jail have emerged, gotten bigger, gotten better, and actually become key players in the illicit market.” Pike points to Kazem Hamad, who was imprisoned for heroin trafficking, deported to Iraq, and allegedly built a global crime syndicate “from his laptop in Iraq” and became “the largest importer and distributor of illicit tobacco in Australia.”
“The government’s policy basically means we’re leaving our health in the hands of criminals,” he says.
Australia is another cautionary tale of what happens when the government polices adults’ personal choices and opens a new front in the war on drugs. Even though the Australian government has now reversed course and reduced tobacco taxes, illegal purchasing has become normalized. Getting customers out of the thriving black market created by the taxes will be much harder than it was in the first place.
Post Australia Tried to Stop Smoking. 80% of the Tobacco Australians Consume Now Comes from the Black Market. appeared for the first time reason.com.
