Australia has some of the strictest tobacco laws and highest excise taxes in the world, but this has fueled a growing black market for illicit tobacco products. According to a 2025 report by KPMG, illicit tobacco now accounts for an estimated 20% of total tobacco consumption in Australia, costing the government over $3 billion in lost tax revenue annually.
The black market is supplied by organized crime networks that smuggle cheap, untaxed tobacco from Asia and the Pacific. In 2024, Australian Border Force seized over 200 tonnes of illicit tobacco, a record amount. The problem is particularly acute in low-income communities, where smokers turn to illegal products to avoid high prices.
Health experts warn that the black market undermines public health goals by making tobacco more accessible and affordable. The Australian government has responded with increased funding for enforcement and tougher penalties for smugglers, but the illicit trade continues to grow.
