Australia’s Black Market Tobacco Crisis: Policy Denial on Steroids
- Alan Gor
- Sep 21
- 3 min read
Alan Gore 21 September 2025
Australia now has a tobacco black market worth more than $5 billion a year, with 60% of all tobacco sold illicitly, hundreds of firebombings, and even murders tied to organised crime. Yet, instead of confronting the obvious policy failure at the heart of the problem, our government’s new Illicit Tobacco and E-cigarette Commissioner, Amber Shuhyta, has declared that tax reform is off the table.
That’s right, the very policy lever that blew the doors open for organised crime is the one thing she refuses to touch.
The Contradiction at the Heart of the Commissioner’s Stance
In her first public comments, Shuhyta admitted that “large gaps in price between legal and illegal cigarettes could be exploited.” That’s an understatement. Legal cigarettes now cost more than $40 a pack, while illegal ones sell for less than half that. The entire black market exists because of that gap.
Yet she insists lowering or freezing the tax “would not necessarily be effective” at deterring criminals.
So which is it? If the gap fuels the black market, how can you simultaneously claim fixing the gap won’t matter? This is classic bureaucratic doublethink: acknowledging the problem while refusing to consider the obvious solution, because it conflicts with the sacred doctrine of “high prices reduce smoking.”
Hiding Behind Global Comparisons
Shuhyta also argued that illicit tobacco exists “regardless of tax and excise arrangements” in other countries. This is a distraction. Yes, smuggling happens everywhere, but nowhere else in the developed world has it consumed over half the market like in Australia.
We aren’t dealing with normal levels of smuggling. We are dealing with a self-inflicted policy disaster, created by pushing tobacco taxes to absurd extremes while ignoring enforcement. Pointing to other countries doesn’t excuse the fact that ours is now the worst case study in the world.
The “Success Story” That Isn’t
Shuhyta claimed Australia has had “longstanding success” in reducing tobacco consumption. That might have been true ten years ago, but it isn’t now.
As former Border Force strike team head Rohan Pike pointed out, wastewater data shows nicotine consumption has flatlined for a decade and is actually increasing over the last two years. Translation: the official smoking stats no longer reflect reality because millions are buying off the black market. The “success story” being sold by Canberra is a fiction, one that falls apart the moment you stop counting only legal sales.
Organised Crime, Firebombings, and Murder
The government insists this is a “multilayered issue” requiring “multi-agency cooperation.” That sounds impressive until you look at the results:
250 firebombings linked to tobacco turf wars
At least two murders
Criminal syndicates openly selling tobacco online under the government’s nose
This isn’t just a health issue; it’s a public safety crisis. And it was entirely predictable. You don’t create a product with a legal price of $40 and an illegal price of $20 without handing organised crime the greatest business opportunity of the century.
The Real Problem: Ideology Over Evidence
Shuhyta’s position was created inside the Department of Health—the same department that engineered this prohibitionist mess. That means the “independent” commissioner is already handcuffed by the same ideology: protect the tobacco excise strategy at all costs, even as it fails in plain sight.
The hard truth is this:
You can’t police your way out of a policy crisis.
You can’t seize your way out of a black market this size.
And you can’t pretend nicotine use is falling when all you’ve done is push it underground.
As Pike bluntly said: “This is a self-inflicted policy crisis that needs action now.”
What Needs to Change
Stop the denial. Admit that excessive excise created this mess.
Pause the tax hikes. At a minimum, stop making the black market even more profitable.
Consider regulated alternatives. Safe, legal vaping products could undercut illicit tobacco and reduce harm if only the government stopped banning them.
Focus on crime prevention, not revenue protection. The current system funds gangs, not hospitals.
Until these truths are faced, the government will continue to brag about “record seizures” while criminal syndicates laugh all the way to the bank.
Australia is now the global case study in how not to do tobacco control. We’ve turned a public health challenge into a violent, billion-dollar black market. And unless Canberra drops the ideological blinders, the crisis will only deepen.
