Smoke taxes driving people towards black market – and smoking rates up

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New analysis shows high cigarette prices will continue pushing people towards the illicit tobacco trade, amid surging rates of vaping.

Smoking and vaping rates have been climbing since the COVID-19 pandemic began due to an influx of illegal cigarettes and a growing black market, with new analysis showing high taxes on cigarettes are pushing people towards illicit nicotine products.

“The illicit tobacco market is primarily driven by the price discrepancy between legal and illicit tobacco stemming from the imposition of excise of tobacco, which is subject to indexation and periodic discretionary increases,” the budget office analysis said. The biggest hikes in smoking rates appeared to come from respondents aged between 14 and 17. The Cancer Council Victoria research found figures were erratic in this group but they appeared to be trending upwards overall between 2020 and 2023. There were also minor increases among groups aged over 35.

Legislation before the federal parliament will ban non-therapeutic vapes from being imported, manufactured and supplied, regulating them as a therapeutic product handled by pharmacists rather than sold in retailers.The budget office did not forecast additional costs if the Allan government committed any additional funding to regulate a legalised vape market, with about $1.5 million already provided every year to councils for enforcement..

 

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