Australia has reached a significant public health milestone, with daily smoking rates among people aged 14 and over dropping to a historic low of 5.6% in 2025. This figure represents a steady decline from 8.3% in 2022–2023 and continues a long-term downward trend from nearly 20% in the early 2000s. Despite this overall success in reducing the number of people who smoke, new data reveals a concerning shift in how remaining smokers are accessing tobacco products. A growing proportion of those who do smoke are turning to the illicit market, which offers cheaper, untaxed products that bypass Australia's strict plain-packaging and health-warning regulations.
Recent findings from the National Drug Strategy Household Survey indicate that 34% of current smokers reported using illicit tobacco in 2025, a sharp increase from 16.7% just two years prior. These illicit products are often sold through local tobacconists, with some consumers purchasing unbranded tobacco sold loose in plastic bags. Experts suggest that the primary drivers of this trend are the significant price difference between legal and illegal products and the ease of access to the black market. While legal tobacco prices have tripled over the last decade due to high excise taxes, illicit alternatives have remained relatively constant in price.
Public health advocates maintain that the overall decline in smoking prevalence remains a success story, attributed to sustained efforts like advertising restrictions, public education, and plain packaging. However, the rise of the illicit trade presents a complex challenge for policymakers. The black market not only undermines tax revenue, with estimates suggesting it could cost the federal budget billions, but it also risks stalling progress by providing a low-cost alternative that may discourage some smokers from quitting. As authorities monitor these trends, the focus remains on balancing effective tobacco control with the need to dismantle the criminal networks profiting from the illicit trade.