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Australians are spending less to consume more nicotine as illegal tobacco trade explodes
TL;DR
Australians are consuming 40% more nicotine than eight years ago while spending less, as 80% of cigarettes smoked last year were illegal. The rise in illegal tobacco and e-cigarettes has led to a drop in household spending on cigarettes to 2016 levels.
Key points
- Australians consume 40% more nicotine since 2017
- 80% of cigarettes smoked in Australia are illegal
- Household spending on cigarettes dropped to 2016 levels
- Legal cigarette prices have tripled since 2016
- Growth driven by illegal tobacco and e-cigarettes
Australians are consuming more nicotine than they were eight years ago but are spending less, new data from the Australian Bureau of Statistics shows, as 80% of the cigarettes smoked by the nation last year were cheaper illegal products.
The analysis released by the Australian Bureau of Statistics (ABS) on Wednesday showed the amount of nicotine consumed around the country soared by 40% between 2017 and 2025, despite population growth rising by just 14%.
The ABS said the growth was driven by illegal tobacco and increases in e-cigarettes and other products. In 2017, only 12% of the total tobacco consumed was from illicit sources. By 2025, that had risen to 80%.
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More Australians accessing cheaper illegal products has resulted in the dollar value of household spending on cigarettes dropping to levels similar to those seen in 2016, the ABS analysis found. It said the cost of legal cigarettes had tripled since then, but the price of illegal tobacco products had remained relatively constant.
The release of the figures marked the first time the ABS has provided estimates on illegal tobacco consumption, after it began developing methods to assess how the economic impact of the trade “would be conceptually treated” in Australia’s national accounts.
It noted that the estimates, which were assisted by nicotine metabolite concentrations detected in wastewater samples, were experimental and the method and data sources could change.
The New South Wales health minister, Ryan Park, told Guardian Australia the data was “unsurprising” and pointed to a “growing disparity between the cost in legal and illicit tobacco, created by the federal government’s tobacco excise”.
“As we face one of the toughest cost-of-living challenges in living memory I can only see excise-free products become more and more attractive,” he said.
“This public health failure has seen states and territories have to dedicate further resources in licensing, enforcement and in dealing with the healthcare challenges that result from it.”
Last year, the amount of money going to government coffers from high taxes on legal tobacco dropped to , creating a $6.9bn hole in the federal budget as the illegal tobacco market boomed.
Q&A
What percentage of cigarettes consumed in Australia are illegal?
As of 2025, 80% of the cigarettes smoked in Australia are from illegal sources.
How much has nicotine consumption increased in Australia since 2017?
Nicotine consumption in Australia has increased by 40% between 2017 and 2025.
Why has household spending on cigarettes decreased in Australia?
Household spending on cigarettes has decreased due to the increased availability of cheaper illegal tobacco products, despite the legal cigarette prices tripling.
