Australia’s official data show a 40% rise in total nicotine consumption from 2017 to 2025, driven by illegal tobacco, e-cigarettes and other nicotine products, with illicit sources accounting for about 80% of cigarettes smoked in 2025 (up from 12% in 2017).

In March 2022, total nicotine consumption was 5,244 kg, consisting of 1,707 kg illicit and 3,345 kg legal, illustrating a shift toward illicit products over time.

The ABS findings align with earlier estimates from the illicit tobacco and e‑cigarette commissioner, which suggested roughly half of tobacco consumption was illegal, though ABS now indicates a larger illicit share when all nicotine products are counted.

Public health and criminology experts remain divided on whether excise should be lowered to reduce criminal incentives or maintained with stronger enforcement to combat the illegal trade.

Government revenue from tobacco excise has fallen to its lowest level in 14 years, contributing to a multi‑billion-dollar budget shortfall and fueling debate over whether to cut excise or boost enforcement.

Politically, the chair of the Coalition’s Illegal Tobacco Taskforce argues the current excise system should be reformed, claiming the government’s policies have fueled black‑market activity.

Border Force seizures of illicit tobacco have exceeded 1,000 tonnes since late 2025, alongside closures of illegal shops, signaling ongoing enforcement but also a need for broader policy reform.

Federal and state governments are spending over $300 million to combat illicit tobacco as the trade expands and legal tax revenues fall.

NSW Health Minister notes the data are unsurprising and points to a widening gap between legal and illicit tobacco costs, attributing it to excise policy and rising living costs.

Analyses show that looking only at legal tobacco sales can mislead: legal prices have surged due to excise hikes, while illicit product prices rose more slowly, widening the price gap.

States are tightening penalties for illicit tobacco supply, with NSW imposing penalties for landlords of shops selling illicit tobacco and severe penalties for possession or sale, while Victoria sets high fines or prison terms.

The government has formed the Illicit Tobacco National Disruption Group, led by the Australian Border Force, and other multi‑agency efforts to curb illicit supply and consumption.