Australia's tobacco tax drives black market surge and gang violence

The Australian government has increased tobacco excise taxes over the past decade, making cigarettes among the world's most expensive (average AU$54.99 per pack). Prices for legal products have almost tripled since 2016, while illicit tobacco prices have stayed flat. A 2025 analysis by the Australian Bureau of Statistics estimates that 80 % of tobacco consumed in Australia is now illegal, up from 12 % in 2017. Household spending on legal cigarettes has halved, but nicotine consumption rose about 40 % between 2017‑2025. Tax revenue from tobacco duties is projected to fall by about $8 billion over five years.

The collapse of the legal market has been linked to a wave of organized‑crime violence. Since 2023, groups tied to the illicit tobacco and vape trade have been connected to more than 200 fire‑bombings, at least three homicides and numerous non‑fatal attacks, according to the Australian Intelligence Commission. Former AFP detective Rohan Pike describes the situation as an “old‑fashioned turf war” in which gangs use arson and shootings to control distribution, targeting retailers and venues. The violence escalated after the tax hikes gave criminals a lucrative market.