Has Australia lost control of its tobacco and nicotine markets?

Australia has adopted two policies that the World Health Organization (WHO) recommends as best practice for tobacco control: it has steeply increased tobacco taxes since 2010 and only allowed access to nicotine vapes for medical use.

The rate of decline in tobacco smoking in Australia has slowed in the past decade but may have recently increased. At least half of all tobacco cigarettes and most vapes in Australia are now purchased from an illicit market that exceeds the size of the combined Australian illicit markets for cannabis, cocaine, heroin and ecstasy (MDMA). An estimated $7 billion in tobacco excise and arson attacks on tobacco retailers have prompted large increases in law enforcement funding. Based on the experience from other illicit markets, increased enforcement will at best limit sales but at likely enormous social and economic cost and, specific to nicotine, constraining access to vapes and thus potentially leading to more smoking. New Zealand, which allows vapes to be sold as consumer products under public health-oriented regulations, has shown a faster decline in the prevalence of cigarette smoking than Australia. It also has high tobacco taxes but a much smaller illicit tobacco market.

Punitive taxes on cigarettes and restricted access to lower-risk nicotine products have diverted Australians who use nicotine into illicit markets and may also have increased cigarette smoking among young people. Australia should allow easier consumer access to less harmful alternative nicotine products to help bring the illicit tobacco and nicotine markets under better control.