Government reports illicit-tobacco decline, with uncertainty over black-market size

The federal government says coordinated enforcement is beginning to reverse years of growth in Australia's illicit-tobacco market. New estimates from the Illicit Tobacco and E-cigarette Commissioner put the market at up to 5,893 tonnes, below the previous peak of 5,972 tonnes, but with a lower estimate of 4,453 tonnes. The range matters: illegal sales cannot be counted as precisely as regulated retail trade.

ITAC says the estimate follows five years of average annual growth of 22.6 percent. The commissioner argues that additional datasets, including biennial health-and-welfare data, narrow the uncertainty. Assistant Minister for Customs Julian Hill attributes the change to seizures, store closures, disruption of criminal networks and public-health measures reducing demand. This is the government's assessment of the evidence, not proof that illicit trade has been eliminated.

Border Force seized 730 tonnes in July-September, a record quarter that also demonstrates the continuing scale of supply pressure. Seizures are not themselves a direct measure of total consumption: they can rise because enforcement improves, supply expands, or both. The market estimate and the seizure figure therefore describe different things.

The 31-agency National Disruption Group has coordinated more than 600 operations since its establishment last October. It reports 24 million cigarettes and 3.6 tonnes of loose tobacco seized, representing more than $45 million in evaded duty, and 1,300st ores closed through ground operations. Another 340 referrals from overseas partners resulted in tobacco and vape seizures. New Zealand customs official Terry Brown said the connected model was informing his country's response to cross-border criminal networks.

The policy dispute continues. The Coalition proposes an 80 percent tobacco-excise reduction and regulated alternatives including vapes and nicotine pouches; One Nation proposes a 75 percent cut. Labor says such changes could undermine progress in reducing smoking. Statistical estimates cited in the debate put illicit nicotine consumption at 80 percent in 2025, compared with 12 percent in 2017, while daily smoking has fallen to 5.8 percent. Those measures cover different behaviours and periods and should not be treated as interchangeable.