Queensland’s War on Illicit Tobacco and Vapes Has Become an Admission of Policy Failure

The latest Queensland Health article, “Everything you need to know about illicit tobacco and vapes”, appears to have been written with a straightforward objective: to reassure the public that authorities are taking decisive action against illicit nicotine products and that Australia’s increasingly restrictive approach to tobacco and vaping regulation is being effectively enforced. Instead, it reads as something altogether different. Far from demonstrating a policy success story, the article inadvertently provides one of the clearest admissions yet of the scale of Australia’s illicit nicotine market and the unintended consequences of the country’s increasingly prohibitionist approach to nicotine regulation.

The figures alone are extraordinary. Queensland authorities report seizing more than 17 million illicit cigarettes, 5.4 tonnes of loose tobacco and 117,500 vaping products in 2024, with an estimated value exceeding $22 million. By the end of May 2025, those figures had already escalated to more than 32 million illicit cigarettes, 4.1 tonnes of loose tobacco and 201,000 vaping products worth over $38 million. More than 819 infringement notices and 121 closure orders have been issued, and Queensland now boasts the highest fines in Australia for illicit tobacco and vaping offences. These figures are clearly intended to demonstrate the effectiveness of enforcement, but they may instead demonstrate precisely the opposite.

Large seizures are not necessarily evidence that a black market is shrinking; in many cases, they are evidence that a black market has become deeply entrenched, highly profitable and increasingly sophisticated. No government agency would point to record drug seizures as proof that the illicit drug market is collapsing because criminologists have long cautioned against using seizure statistics as indicators of policy success. Increasing seizures frequently occur alongside growth in the underlying market itself because, as demand increases and supply chains expand, more products move through the system and enforcement agencies inevitably intercept a larger number of shipments.

The article unintentionally reveals precisely this dynamic. Queensland Health openly acknowledges that cheap illicit tobacco and vaping products have become increasingly available and that organised crime groups are now deeply involved in their distribution. This should have prompted a far more uncomfortable question than the one the article asks: how did Australia create one of the world’s most profitable illicit nicotine markets?

The answer lies largely in policy. Australia now has some of the highest tobacco taxes in the world while simultaneously adopting one of the most restrictive approaches to nicotine vaping products anywhere outside outright prohibition. Legal access to vaping products has progressively narrowed from a consumer retail market to a pharmacy-only model that has struggled to establish itself as a viable alternative to the illicit trade. Yet the demand for nicotine products has not disappeared. Millions of Australians continue to use nicotine, and many adult smokers and vapers still want access to products that were previously available through legitimate retail channels. Demand did not vanish; it simply moved elsewhere.

This outcome should not have surprised anyone because economics predicts this result with remarkable consistency. When governments restrict legal supply while demand remains substantial, alternative supply channels emerge, and the greater the gap between consumer demand and legal availability, the greater the financial incentive for criminal organisations to enter the market and fill that gap. This is not an unforeseen consequence; it is one of the most predictable consequences of prohibition. The Queensland figures suggest that this process is now occurring on an industrial scale and that an entire underground economy has developed around supplying nicotine products that millions of Australians continue to seek.

Perhaps the most striking aspect of the Queensland Health piece is that it simultaneously acknowledges the extraordinary growth of the illicit market while continuing to frame the solution as more enforcement, larger fines and increasingly punitive measures. This raises a fundamental question: if years of increasingly aggressive enforcement have coincided with record seizures, escalating criminal involvement and an expanding black market, why should anyone assume that even more enforcement will produce a different outcome? At what point does a policy failure become sufficiently obvious that policymakers begin questioning the policy itself rather than simply demanding more resources to enforce it?

The evidence from other prohibition policies should make us extremely cautious. History is replete with examples where intensifying enforcement increased the profitability of illicit markets without eliminating demand. Alcohol prohibition in the United States gave rise to organised criminal enterprises and illicit supply chains that proved enormously difficult to control. The global war on drugs has consumed vast resources while failing to eradicate drug consumption and has instead generated powerful criminal networks worth billions of dollars. Illicit tobacco markets in countries with extremely high taxes have similarly become lucrative opportunities for organised crime. Australia increasingly appears to be repeating many of these same mistakes.

The Queensland article also contains several assertions that deserve considerably closer scrutiny. The piece states that vaping “very often leads to tobacco smoking”, a statement that is substantially stronger than the available evidence supports. Some observational studies have identified associations between youth vaping and later smoking initiation, but demonstrating causation is extraordinarily difficult because many of the same factors that predispose young people to experiment with vaping also increase their likelihood of smoking. This is known as the common liability or shared risk hypothesis, whereby young people who engage in one risk-taking behaviour are often more likely to engage in others. Consequently, an association between vaping and smoking does not necessarily mean that vaping caused smoking.

This distinction is fundamental and frequently lost in public debate. Indeed, the international evidence increasingly complicates the simplistic gateway narrative because several countries that have experienced substantial increases in youth vaping have simultaneously recorded historically rapid declines in youth smoking. This includes New Zealand, the United States and the United Kingdom. In each of these countries, youth smoking rates have continued to fall despite increases in vaping prevalence, meaning that the claim that vaping very often leads to smoking sits uneasily alongside population-level evidence from countries that have experienced both phenomena simultaneously.

The article also repeatedly emphasises the potential harms associated with vaping while providing remarkably little context regarding relative risk. Smoking is correctly described as one of the leading preventable causes of death and disease in Australia and is responsible for an enormous burden of morbidity and mortality. However, there is little discussion of the growing scientific consensus that, while not risk-free, non-combustible nicotine products expose users to substantially fewer toxicants than combustible cigarettes.

This omission matters enormously because public health is not simply about eliminating all risk; it is about reducing overall harm. If a smoker who cannot quit nicotine switches completely from cigarettes to a substantially less harmful alternative, the potential health gains may be considerable. Ignoring this possibility risks creating policies that inadvertently preserve cigarette smoking by making lower-risk alternatives less accessible.

The irony is difficult to ignore because the Queensland article unintentionally provides evidence of precisely the outcomes that critics of Australia’s vaping policies have been warning about for years. The article describes enormous seizures, widespread non-compliance, escalating criminal involvement, rapidly expanding illicit trade and extraordinary enforcement activity. None of these developments suggests a well-functioning regulatory system; rather, they suggest a market that has been pushed underground.

The pharmacy model was introduced with the promise that it would improve safety, protect young people and eliminate illicit supply, yet illegal retailers continue to proliferate, seizures continue to rise, organised crime continues to profit, enforcement costs continue to increase, and consumers continue to seek products outside the legal framework.

The question that policymakers should now be asking is not whether enforcement should be intensified but whether the policy architecture itself has contributed to the creation of this black market. At some point, every prohibitionist system encounters a paradox because the more resources devoted to enforcement, the more evidence emerges that demand has not disappeared. Consumers continue seeking products, criminal organisations continue supplying them, and governments continue spending ever greater sums attempting to suppress markets that remain remarkably resilient.

Eventually, policymakers become trapped in an expensive and potentially unwinnable cycle of enforcement and unintended consequences.

Queensland’s latest article was intended to demonstrate the success of Australia’s crackdown on illicit tobacco and vapes. Instead, it reads as a case study in the limits of prohibition. Record seizures, record fines and record enforcement activity are not necessarily signs of victory; they may instead be indicators of a thriving black market, robust consumer demand and a policy framework that has failed to achieve its intended objectives.

Because if billions of dollars in demand continue to be met by criminal networks despite years of increasingly restrictive laws, then the real question is not how much more enforcement is required. The real question is whether Australia has created precisely the illicit market it was trying to prevent and whether it is finally time to ask whether the policy itself, rather than its enforcement, is the problem.