New data from the Australian Bureau of Statistics (ABS) reveals that nicotine consumption in Australia has surged by 40% over the past eight years, with illicit sources now accounting for 80% of all tobacco consumed. The findings, released on Wednesday, show that the amount of nicotine used nationwide rose sharply between 2017 and 2025, despite population growth of only 14%.
The ABS attributed the increase to a boom in illegal tobacco and a rise in e-cigarette use. In 2017, just 12% of tobacco came from illicit sources; by 2025, that figure had climbed to 80%. The shift has driven down household spending on cigarettes to levels last seen in 2016, as the cost of legal tobacco has tripled while illegal products have remained cheap.
This is the first time the ABS has provided estimates on illegal tobacco consumption, using experimental methods including wastewater analysis. The data highlights a growing black market that has created a A$6.9bn hole in the federal budget, as tax revenue from legal tobacco fell to its lowest level in 14 years last year.
New South Wales Health Minister Ryan Park called the figures “unsurprising”, pointing to the widening price gap caused by federal tobacco excise. “As we face one of the toughest cost-of-living challenges in living memory, I can only see excise-free products become more and more attractive,” he said. The NSW Premier, Chris Minns, has called for an overhaul of the tobacco excise, arguing it is no longer effective as either tax or health policy.
In response to the illicit trade, NSW has introduced penalties for landlords of shops selling illegal tobacco and created a new offence for possessing commercial quantities of illicit tobacco, carrying a maximum fine of over A$1.5m and seven years in prison. Victoria has also toughened its stance, with fines of up to A$370,000 or 15 years in jail for sellers of illegal tobacco.
