“Australia’s illegal tobacco problem has made the proverbial transition from tragedy to farce,” wrote Alan Kohler for ABC Radio New Zealand, commenting on a new report that suggests Australia’s crackdown on tobacco through high excise taxes and strict regulations has backfired, with illegal cigarettes now making up half of all the nation’s sales.
A study published earlier this year by FTI Consulting said 39.4% of cigarettes sold in the country were illicit in 2024, up from 14% six years ago. However, the firm updated its numbers in June and put the new figure at 50%.
“We can now conclude that the strategy of taxing and banning nicotine addiction out of existence is a complete failure,” Kohler wrote. “The result is that organized crime is making about A$10 billion ($6.5 billion) a year in revenue. Who needs narcotics? With them, you risk lengthy jail time; with smokes and vapes, it’s a fine, but only if you’re very unlucky.”
The federal government has seen tobacco excise revenue collapse from A$16 billion ($10.4 billion) in 2019 to just A$7.4 billion ($4.8 billion) this year. Experts blame excessive taxation, menthol bans, and the lack of coordinated enforcement. Only 1% of shipping containers are inspected, and selling illegal tobacco often isn’t even a criminal offence.