Australia’s Smoking Reversal: How Policy Missteps and the Black Market Are Driving Cigarette Use Up

For decades, Australia was presented as the global success story of tobacco control. Smoking rates steadily declined, and policymakers pointed to high taxes, plain packaging and increasingly strict regulation as proof that the model worked. Australia was frequently held up as an example for the rest of the world. But the narrative that tobacco control had permanently solved the smoking problem is beginning to unravel. Evidence is now emerging that smoking in Australia is rising again. Even more concerning is that some of the institutions that helped shape the current policies appear reluctant to openly confront why this reversal may be happening.

A recent article by Marta Pascual Juanola highlights the growing concern among researchers and policymakers that smoking rates may be increasing for the first time in decades. The article points to a booming illicit tobacco market, the return of smokers who previously quit due to high prices, and evidence that young people are once again turning to cigarettes. This development would represent a profound shift in Australia’s tobacco landscape and would raise serious questions about the policies that helped create the current situation.

One of the clearest signals of this change comes from data produced by Roy Morgan in 2025. Their nationwide survey of nicotine use has been tracking trends across cigarettes, vaping and other nicotine products. The findings from their 2025 report suggest that cigarette smoking has begun to increase following the tightening of vape restrictions in Australia. In particular, the data shows a rise in nicotine use among young adults aged 18 to 24. This age group had previously been moving away from cigarettes for many years, but the latest Roy Morgan figures show an uptick in both smoking and vaping since late 2024.

Roy Morgan Survey, before it was taken down and changed.

It’s also important to note that the Roy Morgan report documenting the post-vape-ban rise in smoking was initially removed from public access and later reinstated with revised wording and graphs. This shift appears to have downplayed the clear connection between restrictive vaping policies and increased cigarette use, creating confusion and allowing policymakers and public health advocates to sidestep the implications of the data. The changes highlight how sensitive the findings were, and there were efforts to soften the narrative that Australia’s current approach to nicotine may be contributing to rising smoking rates.

The implications of this trend are significant. For years, public health messaging focused heavily on the dangers of vaping and warned that e-cigarettes could renormalise smoking among young people. But the Roy Morgan survey suggests a very different possibility. Restricting access to vaping may have pushed some people back toward cigarettes. This interpretation is even hinted at by some researchers. Speaking about the issue, Cheneal Puljevic acknowledged that many people who had switched to vaping are now returning to smoking because vapes are harder to obtain and more expensive under the new regulatory system.

“We also know that many people who are vaping have now switched to tobacco because vapes are harder to get and more expensive, and that is also a policy failure,” Puljevic said.

This outcome represents the opposite of what policymakers intended. Vaping was widely recognised internationally as a lower risk alternative to smoking, and in many countries it has been associated with accelerated declines in cigarette use. Australia chose a different path by severely restricting access to vaping products and pushing them into a prescription model. The result may have been to remove a key off ramp away from cigarettes.

At the same time, Australia’s extremely high tobacco taxes have produced another unintended consequence. The country now has one of the largest illicit tobacco markets in the developed world. According to criminologist James Martin from Deakin University, illicit nicotine has become one of the most valuable sectors of the organised crime economy. Billions of dollars are now flowing through illegal cigarette networks, and criminal groups are fighting to control the trade. In recent years, this has been linked to firebombings of tobacco shops, extortion rackets and violent turf wars.

The scale of the problem has become so obvious that even government figures have begun to acknowledge the role of policy in creating it. Assistant minister Julian Hill recently conceded that denying the impact of high tobacco taxes on the illicit market would be nonsensical. For years, officials had suggested that the growth of illegal cigarettes was primarily due to foreign criminal supply chains. But law enforcement and economic analysis increasingly point to Australia’s taxation policy as the underlying driver that made the black market so lucrative in the first place.

The public health establishment is now facing an uncomfortable possibility. If smoking rates are indeed rising, the current policy framework may be contributing to the problem rather than solving it. The official data from the National Drug Strategy Household Survey has not yet been released for the latest period, but many researchers expect it may confirm the trend suggested by the Roy Morgan data. If that happens, it will be the first time in decades that smoking prevalence has increased in Australia.

Despite this growing evidence, discussion of the Roy Morgan findings has been remarkably muted within many tobacco control circles. Researchers such as Becky Freeman from the University of Sydney have acknowledged concerns about the possibility of smoking rates increasing, but the broader implications of the data are rarely explored publicly. The possibility that restricting vaping could lead to more smoking is largely absent from official messaging.

This silence matters because it shapes how the public understands the issue. For years, the dominant narrative presented vaping primarily as a threat rather than as a potential harm reduction tool. If the Roy Morgan data is correct, that narrative may have obscured an important reality. Some smokers appear to have used vaping as a way to move away from cigarettes. When access to that alternative became restricted, some of them may simply have returned to smoking.

Meanwhile, the illicit tobacco market continues to grow. Cheap cigarettes are widely available through illegal channels, undermining the very tax policies that were meant to reduce smoking. Economic analysis from Oxford Economics has warned that if current trends continue, the legal tobacco market could shrink dramatically as consumers shift to illicit products. In the most extreme projections, a large majority of cigarettes consumed in Australia could eventually come from the black market.

The warning from British American Tobacco that it may eventually leave Australia should alarm policymakers far beyond the tobacco industry itself. Not because a cigarette company might exit the market, but because of what that exit would represent: the near-total collapse of the legal tobacco market.

According to BAT’s global corporate officer, Kingsley Wheaton, Australia is on track to become the first developed nation where criminals effectively control the cigarette trade. His claim may sound dramatic, but the numbers being discussed in policy circles suggest it is not entirely unrealistic.

Estimates now suggest roughly 75% of cigarettes sold in Australia are illicit. Legal packs can cost around $50, while black-market cigarettes sell for about $15. That price gap alone explains why the illicit market has exploded. When the difference becomes that extreme, the incentives for smuggling and organised crime become enormous.

The situation reveals a fundamental flaw in the current policy approach. Governments can regulate legal markets, but once demand is pushed into illegal channels, control is largely lost. Enforcement measures such as closing tobacco retailers or increasing penalties may slow the trade temporarily, but they cannot eliminate a market created by strong consumer demand and enormous profit margins.

Australia now faces a paradox. The country implemented some of the strictest anti-smoking policies in the world, and at the same time severely restricted access to lower-risk nicotine alternatives. The result appears to be a combination of rising illicit trade, growing organised crime involvement, and early signs that smoking may once again be increasing among young adults.

The Roy Morgan survey does not merely challenge the prevailing narrative about nicotine in Australia. It forces a deeper question about whether the current approach has overlooked the importance of harm reduction. If safer alternatives are removed or made difficult to access, the most dangerous form of nicotine consumption often remains the easiest to obtain.

For decades, Australia’s tobacco control system celebrated falling smoking rates as proof that its policies were working. But if the new data is confirmed, the country may be entering a very different chapter. The real test of any public health strategy is whether it reduces harm in the real world. If smoking is now rising again, it may be time to reconsider whether the policies designed to eliminate nicotine have instead pushed many people back toward the product that causes the greatest damage.