Australia nicotine consumption skyrockets 40 per cent since 2017 as people turn to the black market

Nicotine use in Australia has skyrocketed 40 per cent since 2017 as people turn to the black market for cheaper products, according to new ABS data.

The Australian Bureau of Statistics report estimated 80 per cent of all cigarettes smoked by the nation in 2025 were cheaper illegal products.

The shocking rise was revealed in an ABS report on Wednesday after the agency explored new ways to better measure black-market use.

To get a more accurate picture of nicotine use nationally, the ABS has looked beyond recording traditional legal sales and attempted to track illegal purchases through wastewater testing.

The ABS said the experimental method started in mid-2025 after questions and “sustained user interest” about Australia tracking consumption.

Based on legal tobacco sales alone, it appeared Australians were spending less money and getting healthier.

However, the report backs long-held belief that consumers were actually changing their habits away from “higher-priced, legal tobacco” and opting for “cheaper illicit products”.

“Prices for legal tobacco products have almost tripled since December 2016 driven by annual tobacco excise increases,” the report stated.

“In contrast, price growth for illicit tobacco products is estimated to have been relatively low.”

Of the 8030 kilograms of cigarettes and tobacco believed to have been consumed in Australia to the December 2025 quarter, 5143kg were illicit products — compared to 1241kg of legal sales.

It marked a contrast from March 2022 — just a couple months after Anthony Albanese became Prime Minister — when total consumption was at 5244kg — of which 1707kg was illicit and 3345kg was from legal sales.

“Greater accessibility and affordability of illicit tobacco products are likely to have enabled higher tobacco consumption,” the report stated.

While a report released by the Illicit Tobacco and E-cigarette Commissioner in 2025 had estimated a lower figure of about 50-60 per cent, the ABS estimates included a broader scope.

The ABS figures include all forms of nicotine, such as cigarettes, vapes, Nicotine Replacement Therapy, nicotine pouches, prescription nicotine, nicotine gums.

Federal Liberal MP Mary Aldred, who is chair of the Coalition’s Illegal Tobacco Taskforce, has previously been outspoken about the issue, insisting the current tobacco excise system needs to be overhauled.

“The Albanese Government’s tobacco policy has become a gift to organised crime, wrapped in plain packaging,” Ms Aldred said.

“Smoking rates are rising, the black market controls 80 per cent of consumption and communities are paying the price through violence, intimidation and firebombings.”

The issue is costing the budget bottom line with the Treasury now projecting the tobacco excise revenue will collapse to $4.1 billion, before dropping even further to just $2.1B by mid-2030

The Albanese government has implemented a suite of measures to combat this issue including establishing the multi-agency Illicit Tobacco National Disruption Group led by the Australian Border Force.