Australia’s illicit tobacco crisis has reopened doors long closed to Big Tobacco, as companies lobby for excise cuts and gain private access to political decision-makers.

With the rise in illicit tobacco sales in Australia, tobacco control policy has become a headline issue.

But while the debate over tobacco taxation has dominated public discussion in recent times, Big Tobacco has been lobbying tirelessly behind closed doors to unravel Australia’s strong public health policies. These efforts are the latest chapter in a long-running campaign to weaken tobacco control measures and protect industry interests – well preceding the rise in illicit tobacco.

The state of play – the tobacco wars and excise debate

Experts unequivocally agree that there has been a substantial growth in the illicit tobacco market in Australia. The report from the Illicit Tobacco and E-cigarette Commissioner released in 2024-25 estimated the size of the illicit tobacco market to now be around 50-60 per cent of Australian tobacco consumption. Among some groups this is likely higher, with one study showing 80 per cent of recent tobacco purchases among young adults were likely illicit.

Australia is losing approximately $7.7-11.8 billion annually in tobacco tax due to the illicit market.

With an estimated 40,000 tobacco retailers across the country, the lack of controls on where tobacco can be sold has contributed to a rapidly expanding illicit market, where organised crime networks have leveraged this widespread retail network for the supply of illicit products.

The debate on how to reduce the illicit tobacco crisis has largely centred around one policy: Tobacco excise. Some argue that a significant reduction of the tobacco excise is necessary to lower the price gap between illicit cigarettes, which can cost as low as $7-10 a pack, and regulated packs, which cost around $40 for a budget brand. Others, including public health researchers and health bodies, argue this would risk making both regulated and illicit tobacco........

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