Australia's small-minded lawmakers and their relentless war on nicotine, has empowered criminals, gutted public health, and undermined harm reduction. With Europe seemingly following in Australia's footsteps, experts hope these sad circumstances will serve as a cautionary tale of unintended consequences.
In recent months, Australian news outlets have spotlighted a growing crisis: the nation’s aggressive anti-smoking policies have unintentionally created fertile ground for a booming illegal tobacco trade, now estimated at $5 billion. Two investigative programs — Four Corners’ Tobacco Wars and 60 Minutes — have peeled back the layers on this unintended consequence, revealing that criminal syndicates are thriving amid skyrocketing cigarette prices and restrictive nicotine laws. These gangs have turned to arson, threats, and violence to dominate this lucrative black market, with nearly 200 stores reportedly firebombed in under two years.
Heavy taxes, light results
The root of the problem lies in Australia’s strategy to curb smoking through relentless tax hikes. While intended to discourage tobacco use, the outcome has been the opposite: smokers are simply turning to the underground market, where cigarettes are untaxed and unregulated. The Federal Budget took a hit, too — with tobacco tax revenues projected to plunge from $16.8 billion in 2019 to just $6.4 billion by 2028.
Economist Chris Richardson called it a catastrophic misstep, warning that excessive taxation had made smuggling and illegal sales as profitable as drug trafficking — but with far fewer legal consequences. And what is infuriating, is that local tobacco harm reduction experts such as Dr. Colin Mendelsohn and Dr. Alex Wodak, have been warning authorities that this would be the result of the set harsh restrictions, for years, and blatantly ignored.
Ex-Detective Superintendent Rohan Pike, who helped establish Australia’s Tobacco Taskforce, now works with retailers impacted by this crisis, reported Independent Australia. He describes the current tobacco control approach as one of the country’s worst policy disasters, pointing to a failure to adapt or heed early warnings.
The irony is thick: health officials viewed falling legal sales as a success, believing their tax strategy was working — but nicotine use hadn’t declined. Wastewater analysis revealed that consumption remained high; people had simply shifted to illicit sources.
Vape restrictions compound the problem
Rather than promoting harm reduction, such as encouraging safer alternatives like vaping or smokeless nicotine, Australian health authorities doubled down. New laws severely restricted access to legal vapes, requiring a doctor’s prescription and banning flavoured products. Once again, predictably, this sent millions to the black market. A recent national survey found that 87% of vape users had bypassed legal channels entirely.
Dr. Wodak, compared the current approach to the failed global war on drugs — driven by ideology, misinformation, and inflexibility. Meanwhile, legal access to safer nicotine products remains limited, pushing Australians into unregulated markets and increasing public health risks.
Criminals step in where government stepped out
In another ironic twist of events, organised crime has done more to support smokers in switching from cigarettes to less harmful alternatives than official policy. Dr. Wodak dryly observed that the black market, despite its dangers, had succeeded in reducing cigarette smoking — not the government’s outdated tactics.
Dr. James Martin of Deakin University has also described the situation as a “complete disaster,” attributing the crisis to a policy mismatch: making cigarettes more expensive while simultaneously making vaping less accessible. With over 90% of vapes now sold illegally and tobacco and nicotine-related organized crime flourishing.
Despite mounting evidence, Health Minister Mark Butler dismissed suggestions to pause tax increases or liberalise nicotine regulations, insisting that would mean giving in to tobacco companies and criminal networks. Yet by refusing to pivot, the government is already ceding control. The message from experts is clear: Australia’s one-size-fits-all war on nicotine has failed. Until policymakers adopt a more balanced, evidence-based approach, the black market will continue to thrive — and public health will continue to suffer.
The road to hell Is taxed with good intentions
Meanwhile, as detailed in recent budget reports, Australia’s tobacco tax revenues are plunging, with losses projected to hit A$10 billion by 2029, fueled to the explosion in illegal tobacco and nicotine sales. To add insult to injury, Europe seems to be headed in the same direction, and is being urged to take notice.
Despite this mounting evidence from Australia, as well as Canada, the U.S., and now the Netherlands, that such measures often backfire, across the continent, countries are moving toward restrictions like flavour bans. In the Netherlands for example, most vapers now buy products from abroad or return to smoking, showing clear signs of policy failure.
Just like Australia’s rigid policies have driven many consumers away from regulated nicotine alternatives and into the unregulated black market, experts argue that Europe’s proposed approach—disconnected from current scientific consensus—will damage public health goals by undermining harm reduction efforts.
Against this back drop, the UK’s upcoming Tobacco and Vapes Bill at least suggests a more measured approach, seeking to balance youth protection with adult access to effective quitting tools. While certainly not perfect, it may serve as a better model than the heavy-handed measures seen elsewhere.
Europe urged to take note!
Harm reduction experts like Clive Bates caution that “no one has the perfect solution,” but emphasize that evidence, not ideology, should guide policy. As Europe prepares to revise its Tobacco Products Directive, the stakes are high. Poorly designed laws risk not only public health setbacks but also the emergence of thriving illicit markets.
To avoid repeating Australia’s mistakes, European leaders should adopt science-driven, proportionate regulations that protect public health while supporting adult smokers looking to quit. The choice isn’t between regulation and chaos—it’s between smart policy and preventable failure.