Key Points
● ABS quantifies illicit nicotine market;
● Illegal sources account for about 80%;
● Treasury cuts revenue forecast by A$8 billion;
● Tobacco tax policy faces renewed scrutiny.
2Firsts
2Firsts, June 3, 2026 — According to ABC News, the Australian Bureau of Statistics (ABS) has released its first experimental estimate of the country’s illicit nicotine market, finding that approximately 80% of cigarettes, vapes and other nicotine products consumed in 2025 came from illegal sources.
ABS said the share of tobacco consumption sourced from illicit channels rose from 12% in 2017 to 80% in 2025.
The agency found that overall nicotine consumption increased by nearly 40% between 2017 and 2025, driven largely by rising consumption of illicit cigarettes, vaping products and other nicotine products.
The estimate was based on wastewater monitoring data. ABS analyzed nicotine metabolite concentrations detected in wastewater samples and combined the results with data showing a collapse in household spending on legal tobacco products.
According to the agency: “The increase was underpinned by a large rise in illicit cigarettes as well as increases in e-cigarettes and other nicotine products.”
The report noted that legal tobacco prices in Australia have nearly tripled since 2016, largely due to repeated increases in tobacco excise taxes.
The excise now stands at A$1.52 per cigarette (approximately US$0.99), accounting for more than 80% of the retail price and pushing the cost of a 25-cigarette pack above A$50 (approximately US$32.5).
By comparison, illicit cigarettes are commonly sold for around A$25 per pack (approximately US$16.3), roughly half the price of legal products.
James Martin, a criminologist at Deakin University, said: “These numbers put it in the most stark terms possible.”
He described the findings as “absolutely staggering” and said they represent “a massive policy failure and require a radical rethink.”
On the fiscal side, Australia’s Treasury downgraded projected tobacco excise revenue by A$8 billion (approximately US$5.2 billion) over the next five years in the latest federal budget.
Meanwhile, the country’s Illicit Tobacco and E-cigarette Commissioner previously estimated that illicit cigarettes and vaping products account for around 60% of the market.
That report estimated excise tax evasion at between A$7.7 billion and A$11.8 billion (approximately US$5.0 billion to US$7.7 billion).
Enforcement data show that Australian Border Force officers seized more than 2.66 billion illicit cigarettes in 2025, up from 480 million in 2016.
Asked whether tobacco excise taxes should be reduced, Treasurer Jim Chalmers said he remained skeptical that such a move would achieve its intended outcome.
Assistant Customs Minister Julian Hill rejected the proposal outright.
Hill said: “The excise argument simply doesn’t stand up to scrutiny.”
He argued that Australia should not abandon its public-health objectives because of criminal activity.
The Australian government continues to focus on border enforcement, regulatory oversight and targeted crackdowns on illicit tobacco and vaping products rather than changing its tobacco tax policy.
（Image source: ABC News ）
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