ABS estimates 80pc of tobacco consumed in Australia last year illegal

[El Presidente]

https://www.abc.net.au/news/2026-06-03/abs-estimates-80pc-of-tobacco-used-in-australia-illegal/106756000

 

ABS estimates 80pc of tobacco consumed in Australia last year illegal amid 'rapid growth' in black market

 

An estimated 80 per cent of the cigarettes and other nicotine products consumed in Australia last year were illegal, according to the Bureau of Statistics, which has analysed the "rapid growth" of the black market for the first time.

Data released by the ABS today found nicotine consumption increased by almost 40 per cent between 2017 and 2025, while household spending on legal tobacco products fell dramatically over the same period.

 

"The increase was underpinned by a large rise in illicit cigarettes as well as increases in e-cigarettes and other nicotine products," the ABS analysis found.

"Consumption from illicit sources, as a share of total tobacco consumed, rose from 12 per cent in 2017 to 80 per cent in 2025."

The experimental estimates are based on "nicotine metabolite concentrations" detected in wastewater samples, combined with data showing a collapse in household spending on legal cigarettes and vapes.

 

In its analysis, the ABS points out prices for legal tobacco have almost tripled since 2016, driven by steep increases in the excise, which experts blame for creating a black market that has spiralled out of control.

"These numbers put it in the most stark terms possible," said James Martin, a Deakin University criminologist who described the findings as "absolutely staggering".

"This is a massive policy failure and requires a radical rethink.

"It's simply not possible to enforce your way out of a mess of this size."

Australia has among the highest cigarette prices in the world, with the tax alone increasing by more than 200 per cent in the past decade.

Illegal cigarettes can sell for about $25 a pack. (Supplied: Australian Border Force)

The excise is now worth $1.52 per stick (more than 80 per cent of the total cost), pushing the price of a packet of 25 cigarettes well over the $50 mark.

Under-the-counter cigarettes sell for around $25 a pack and are being imported in huge quantities, mainly from Asia and the Middle East.

Tax has been the cornerstone of efforts to drive down smoking rates in Australia from about 25 per cent of adults in the early 2000s, to around 10 per cent today, which is why public health experts are in favour of a high excise.

Excise downgraded by $8 billion

Historically, the tax was increased twice yearly in line with inflation, but in 2010 — along with its plain-packaging reforms — the federal government started taking a more aggressive approach.

In that year, the tax was increased by 25 per cent, followed by annual hikes of 12.5 per cent between 2013 and 2020.

These hikes were in addition to the twice-yearly increases, which are now pegged to average earnings rather than inflation.

Critics say the steep increases have pushed Australians to a black market that is robbing the federal budget of billions of dollars and forcing legitimate retailers to shut down.

In the latest federal budget, Treasury downgraded tobacco excise revenue by $8 billion over the next five years.

While the Coalition is open to reducing the tobacco excise to encourage smokers to shift to the legal product, the Albanese government has resisted calls to change tack.

Instead, it has focused on bolstering enforcement at the border, appointing an Illicit Tobacco and E-cigarette Commissioner, whose latest report estimated illegal cigarettes and vapes made up 60 per cent of the total market.

That report was limited to cigarettes and vapes while today's ABS data included all nicotine products including pouches. 

"Estimated excise evaded ranges from $7.7 billion to $11.8 billion," the report stated, quantifying the amount of revenue being lost to the black market.

Border Force last year seized more than 2.66 billion illegal cigarettes at the border, up from 480 million in 2016.

Asked recently about calls to cut the excise, Treasurer Jim Chalmers said he was "sceptical" that it would achieve what critics were hoping.

Assistant Customs Minister Julian Hill dismissed the idea altogether.

"The excise argument simply doesn't stand up to scrutiny," he told the ABC.

"What magic level of excise reduction would make any material difference to transnational and serious organise crime profitability?

"The option is not to surrender our nation's health policy to organised crime or condemn the next generation to the scourge of smoking-related disease and early death.

[Gubbins]

You love to see it.

[benfica_77]

"This is a massive policy failure and requires a radical rethink."

That sums thinks up nicely....government push consumers enough they will sail the high seas or find other means to consume the desired goods. 

Subscriptions for TV have become comically expensive and you need 5/6...build your own media server and run Jelly Fin / Plex. 

The rise of IPTV to consumer sports and tv channels when ti costs a small fortune for a NHL / NFL etc sports package that has regular blackouts. 

Consumers will find a way...we always do. ARRRRRRR

[Dadof3]

Is vaping smoking?  

[Çnote]

5 hours ago, Dadof3 said:

Is vaping smoking?  

Depends on where you are.

[JohnS]

It's absolutely ridiculous that things have come to this in Australia. The actions of the Australian government in the last 10 years (or more) has been akin to the proverbial ostrich sticking their head in the sand. Meanwhile, legitimate business owners, such as our host, have to put up with a swathe of obstacles just to stay afloat. Pathetic...just egregiously pathetic.

[ATGroom]

6 hours ago, Dadof3 said:

Is vaping smoking?  

They are mentioning vaping alongside the cigarettes in this context because nicotine vapes are illegal in Australia unless prescribed by a doctor and sourced from a pharmacy, however, they are widely available and much cheaper when purchased illegally under the counter in smoke shops.

The tax has compounded 15% per year for a decade and has really has gotten insane in Australia. I travel a couple of times a year to cigar launch events, and will bring back very much a "personal use" quantity of cigars... generally 10 or so random singles I have traded with people and whatever the gift bag at the event had in it, usually another 10 sticks. I always declare and pay the tax, which on that amount of cigars is usually more than what I paid for my flights.

You can tell a legal cigarette butt because they have a health warning printed on them, but look in any ashtray and you won't see one. I know several perfectly respectable middle-aged family man smokers who would never normally commit any kind of petty crime, but all of them have switched to illegal cigarettes in the last few years. 

[Christophe]

I follow all of this pretty closely because I'm indirectly in the industry. It's very telling to me that whenever customs or the cops find an illegal cigarette factory in Europe, the published article never mention anything about a possible threat to health of smoking these unlicensed products. It just mentions how much tax revenue they missed out on. 
 

[El Presidente]

1 hour ago, JohnS said:

 Meanwhile, legitimate business owners, such as our host, have to put up with a swathe of obstacles just to stay afloat. Pathetic...just egregiously pathetic.

Yes 👆

 

Ridgy didge cleanskin operators like myself are appalled. 

[westg]

Well Mr Hill (Benny) you have done exactly that. Speaking to  young men in the mining industry one comment given was that if you want to get into smoking now is the time. It is all to easy to purchase illegal cigarettes and vapes in this neck. You walk into an establishment now and you are given card as to where to go next. It's a revolving set up as if they now when the cops are coming. Do we have dirty cops of course we do, we always have, always will. Politicians are no different. 🫡

[Dadof3]

Are they trying to price it and regulate it out of existence? They can’t have it both ways it seems.  

[Christophe]

11 hours ago, Dadof3 said:

Are they trying to price it and regulate it out of existence? They can’t have it both ways it seems.  

They're trying. It's indeed very bipolar. The EU for example toyed with the idea of having a European tobacco-tax, on top of the existing national taxes, to fund its coffers independently of member state contributions. They were hoping to raise €11.2 billion annually with this.

At the same time, they're pursuing policies which on paper will force people to quit smoking, and in reality just stimulate illicit trade. Make it make sense. 

[Dadof3]

9 hours ago, Christophe said:

They're trying. It's indeed very bipolar. The EU for example toyed with the idea of having a European tobacco-tax, on top of the existing national taxes, to fund its coffers independently of member state contributions. They were hoping to raise €11.2 billion annually with this.

At the same time, they're pursuing policies which on paper will force people to quit smoking, and in reality just stimulate illicit trade. Make it make sense. 

If they want to make it illegal just make it illegal. I think there are some big differences between cigarettes vapes chewing tobacco and premium cigars but considering you know full well that plenty of legislators know the difference they don't do a good job of parsing the tobacco products. The price of premium cigars will almost certainly work as a lid on consumption and access by younger people. I agree the current approach makes no sense.   

[Christophe]

5 hours ago, Dadof3 said:

If they want to make it illegal just make it illegal.  

They can't afford to. Countries like Belgium and the Netherlands rake in billions of euros tax revenue simply from tobacco excise tax every year. Countries like France, Germany, Italy tens of billions.

Not to mention the quiet part nobody wants to say out loud; one of the biggest tax payer burdens for these countries is pensions. If smokers die earlier, they need less pension. Sure, they need more healthcare in the meantime, but that's a lucrative industry (good for GDP, employment, more taxes...). No politician in Europe actually wants overall healthcare expenditure to take a nose dive, it's one of the few industries left in Europe. (They may want to reduce government expenditure on healthcare, but they're counting on the fact private expenditure will make up for it.)

[Dadof3]

12 hours ago, Christophe said:

They can't afford to. Countries like Belgium and the Netherlands rake in billions of euros tax revenue simply from tobacco excise tax every year. Countries like France, Germany, Italy tens of billions.

Not to mention the quiet part nobody wants to say out loud; one of the biggest tax payer burdens for these countries is pensions. If smokers die earlier, they need less pension. Sure, they need more healthcare in the meantime, but that's a lucrative industry (good for GDP, employment, more taxes...). No politician in Europe actually wants overall healthcare expenditure to take a nose dive, it's one of the few industries left in Europe. (They may want to reduce government expenditure on healthcare, but they're counting on the fact private expenditure will make up for it.)

Then stop the regulating it out of existence.