Australia's smoking success hides an out-of-control illicit nicotine market

WELLINGTON, New Zealand - July 20, 2026 - PRLog -- The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) says Australia's celebration of falling smoking rates ignores a troubling reality: nicotine use is increasingly shifting into a vast illicit market, with federal policy pushing people into illegal supply instead of regulated harm reduction.

Australia's daily smoking rate among people aged 14+ fell to 5.6% in 2025, down from 8.3% in 2022–23 and 19.5% in 2001. But CAPHRA says that headline success obscures what's happening underneath.

New ABS analysis suggests illicit nicotine products now account for around 80% of cigarettes and vapes consumed in Australia, up from just 12% in 2017, alongside a collapse in legal sales even as total nicotine consumption has risen.

"Australia is congratulating itself on lower smoking rates while presiding over one of the fastest-growing illicit nicotine markets in the world," said Nancy Loucas, CAPHRA's Executive Coordinator. "When most cigarettes and vapes are coming from the black market, that is not a public health victory. It is a loss of control."

CAPHRA (http://www.caphraorg.net)  says repeated excise hikes and tight legal access to safer nicotine products have created strong incentives for organised crime, pushing consumers into unregulated supply. Economists and official analyses have warned that tobacco taxes may have passed a tipping point, no longer cutting smoking but instead fuelling demand for cheaper illegal products.

The consequences extend beyond lost tax revenue. Adults buying from illicit sellers face no age checks, no product standards, and no quality controls.

"Prohibitionist instincts and ever-higher taxes have not removed nicotine from Australia," Loucas said. "They have moved it into the shadows, where quality is unknown, youth protections are weaker, and criminal networks profit."

A model across the Tasman

CAPHRA points to New Zealand's more balanced approach, combining strong quit campaigns, tax, advertising bans, and smoke-free measures with regulated access to reduced-risk products. Case studies show New Zealand has cut tobacco consumption per adult far faster than most OECD countries while preserving legal switching pathways for smokers.

CAPHRA says Australia can learn three lessons from New Zealand:

• Keep tax and controls below the threshold that fuels a black market
• Treat harm reduction as part of tobacco control, not a threat to it
• Ensure adults who smoke have legal, regulated access to lower-risk products instead of being driven to illegal supply

"Both countries want fewer people to smoke," Loucas said. "Australia now needs tobacco control that reduces smoking and crime, not just headline smoking rates."

CAPHRA is calling on the Australian government to acknowledge the scale of the illicit market, review its tax-and-ban strategy, and adopt a risk-proportionate approach, one that reduces smoking, contains illegal trade, and preserves regulated access to safer alternatives for adults who would otherwise keep smoking.