The Tobacco Wars Are What Policy Failure Looks Like

The most important thing about the tobacco wars is not the tobacco itself.

Nor is it simply the crime, the violence, or the increasingly brazen activities of organised criminal syndicates.

The most important thing about the tobacco wars is what they reveal about the limits of public policy and the dangers of becoming so committed to a particular approach that evidence from the real world is no longer given the weight it deserves.

Watching 7 Spotlight’s investigation into Australia’s tobacco wars, it was impossible not to be struck by the sheer scale of the crisis that has emerged. Viewers were confronted with images of firebombed businesses, stories of extortion and intimidation, organised crime groups battling for territory, and billions of dollars flowing through underground networks that now operate largely beyond government control. Police forces have established dedicated task forces, governments have announced crackdowns, and law enforcement agencies continue to seize enormous quantities of illicit tobacco products. Yet despite these efforts, the problem continues to grow.

The obvious question is why.

How did a country that once prided itself on having some of the world’s most successful tobacco control policies end up confronting one of the largest illicit tobacco markets in the developed world?

The answer is uncomfortable because it challenges a narrative that many policymakers and public health advocates have spent decades promoting.

The tobacco wars did not emerge from nowhere.

They were not a random accident.

Nor were they simply the result of criminals behaving badly.

Criminals will always seek profitable opportunities. The more important question is how those opportunities were created in the first place.

The uncomfortable reality is that the tobacco wars are not primarily a law enforcement failure, a border security failure, or an intelligence failure. At their core, they represent a policy failure. They are the consequence of a system that unintentionally created one of the most lucrative black markets in the country and then appeared surprised when organised crime moved in to exploit it.

For decades, Australia’s tobacco control strategy was built around a relatively straightforward idea. If cigarettes became increasingly expensive, fewer people would smoke. Governments, therefore, relied heavily on excise increases, gradually driving up the prices of legal tobacco products year after year. The underlying logic was clear, and for a long time it appeared to work. Smoking rates fell, tobacco consumption declined, and Australia became widely regarded as an international leader in tobacco control.

Public health advocates celebrated these achievements, and understandably so. Smoking remains one of the leading causes of preventable disease and death, and reducing smoking prevalence has undoubtedly produced substantial health benefits across the population.

However, every policy rests upon assumptions, and one of the central assumptions underlying Australia’s tobacco strategy was that smokers would continue to purchase legal products until they eventually decided to quit.

That assumption turned out to be only partially correct.

Many smokers quit. Many never started. But others responded in ways that policymakers either underestimated or failed to anticipate. Rather than simply giving up tobacco altogether, some consumers sought cheaper alternatives. As legal cigarettes became increasingly unaffordable, illegal suppliers stepped in to meet the demand. A parallel market emerged, expanded, and eventually became a vast underground economy worth billions of dollars.

The problem was not that people continued to respond to incentives.

The problem was that policymakers seemed to assume they wouldn’t.

Human beings do not exist inside economic models. They adapt. They substitute. They find workarounds. They make decisions based on price, convenience, habit, and personal circumstances. When demand remains strong and legal products become dramatically more expensive, someone will inevitably offer a cheaper alternative.

In Australia’s case, that alternative increasingly came from organised crime.

The result is the situation we see today. Illegal tobacco has become deeply embedded in the Australian market. Criminal groups have built highly profitable enterprises around supplying products that consumers continue to want but increasingly struggle to afford through legal channels. Competition for those profits has fuelled intimidation, violence, arson attacks, and an escalating cycle of criminal activity that has transformed what was once a public health issue into a major law enforcement crisis.

Perhaps the most remarkable aspect of this story is not that these outcomes occurred. It is that so many people appear reluctant to acknowledge the role policy played in creating the conditions that allowed them to occur.

Instead, much of the public discussion remains focused on enforcement. More raids, more seizures, more investigations, more penalties, and more task forces are regularly presented as the solution. Yet after years of increasingly aggressive enforcement efforts, the black market remains resilient and highly profitable.

At points during the 7 Spotlight investigation, even the government’s appointed Illicit Tobacco and e-cigarette Commissioner, Amber Shuhyta, appeared overwhelmed by the scale of the challenge. Faced with evidence of a black market worth billions of dollars, organised crime syndicates operating across multiple states, widespread non-compliance, and an escalating campaign of firebombings and intimidation, she often looked like a deer caught in the headlights. Rather than conveying confidence that authorities had the situation under control, the interviews unintentionally highlighted just how far events have outpaced the government’s response.

That is not necessarily a criticism of the commissioner personally. The reality is that no individual, task force, or agency was ever likely to solve a problem of this magnitude once it became embedded in the economic incentives of the market itself. The commissioner appeared to be confronting the same uncomfortable reality now facing governments across the country: enforcement is attempting to contain a problem that policy helped create.

The impression left by the program was not of a system managing a crisis. It was of a system struggling to comprehend the size of a crisis that has already grown beyond its control. Every new raid, seizure, and enforcement operation may generate headlines, but they do little to change the underlying dynamics that continue to make illicit tobacco enormously profitable.

There is a simple reason for this.

You cannot enforce your way out of an economic incentive.

As long as there is a substantial price difference between legal and illegal products, the opportunity for illicit trade will remain. If one criminal network is dismantled, another will emerge to take its place. If one shipment is intercepted, another shipment will follow. The profits are simply too large and the demand too persistent for enforcement alone to solve the problem.

As long as there is a substantial price difference between legal and illegal products, the opportunity for illicit trade will remain. If one criminal network is dismantled, another will emerge to take its place. If one shipment is intercepted, another shipment will follow. The profits are simply too large and the demand too persistent for enforcement alone to solve the problem.

This is where the tobacco wars expose a broader weakness in modern policymaking.

Too often, governments become attached to policies that initially produced positive results and begin to assume that extending those policies indefinitely will continue producing the same benefits. The possibility that a policy may reach a point of diminishing returns or begin generating harms that outweigh some of its benefits becomes increasingly difficult to discuss.

The tobacco debate increasingly appears to have reached that point.

Perhaps the clearest illustration of this mindset is the continued push for even greater restrictions despite the obvious emergence of serious unintended consequences. Among the proposals raised during discussions surrounding the tobacco wars has been Simon Chapman’s suggestion that legal cigarette sales should be restricted even further, effectively limiting them to supermarkets. At a time when Australia is already grappling with a vast illicit tobacco market, organised crime infiltration, widespread non-compliance, and escalating firebombings, this proposal reads less like pragmatic policy development and more like ideological persistence in the face of mounting real-world evidence. Rather than engaging seriously with the possibility that the current regulatory trajectory has contributed to the problem, it instead doubles down on the same logic that helped produce it, as though tightening the screws on the legal market will somehow weaken the illegal one that has already flourished in its shadow.

The deeper lesson here extends far beyond tobacco.

Every policy is ultimately a hypothesis about human behaviour. Governments implement policies because they believe people will respond in particular ways. Sometimes those assumptions are correct. Sometimes they are not. But when the outcomes diverge dramatically from expectations, responsible policymaking requires reflection rather than denial.

This is why the tobacco wars matter.

They force us to confront a question that applies to every area of public policy.

Should policies be judged by their intentions or by their outcomes?

The intentions behind Australia’s tobacco strategy were undoubtedly good. Reducing smoking is a worthy goal. Preventing disease is a worthy goal. Saving lives is a worthy goal.

But good intentions cannot be the final measure of success.

Outcomes matter.

And outcomes include unintended consequences.

A policy that reduces smoking while simultaneously creating a vast criminal market, fuelling organised crime, generating violence, undermining compliance, and eroding government revenue cannot be evaluated solely based on its original objectives. All of those consequences form part of the policy’s legacy.

That is not an argument against tobacco control.

Nor is it an argument that policymakers acted maliciously or without evidence.

It is simply an argument for intellectual honesty.

Policies should never become articles of faith. They should never become immune to criticism simply because they were originally successful. They should be continuously tested against reality, and when reality changes, policymakers should be willing to reconsider their assumptions.

The tobacco wars are ultimately a reminder of a simple but profound truth.

Human behaviour cannot be legislated out of existence.

People do not always behave as experts predict. They do not always respond in ways that align with policy models. And when millions of people consistently find ways around a system, it may be the system, not the people, that deserves closer examination.

Reality always gets the final vote.

The tobacco wars are what happens when reality pushes back.

The question now is whether policymakers are willing to listen.

What makes the Australian experience even more difficult to defend is that an alternative path has been visible just across the Tasman Sea. While Australia doubled down on restrictive approaches to nicotine, New Zealand embraced tobacco harm reduction as part of its broader smoke-free strategy. Rather than treating vaping primarily as a threat, New Zealand increasingly viewed it as a substitute for smoking and a tool to help adult smokers move away from combustible tobacco.

The results have been striking. New Zealand has experienced some of the fastest declines in smoking prevalence in the developed world while maintaining a regulated legal vaping market. Smoking rates among adults have fallen dramatically over the past decade, helping move the country closer to its smoke-free goals. Meanwhile, Australia has spent much of the same period focused on restricting access to vaping products while continuing to rely heavily on taxation and enforcement as its primary tobacco control tools.

This does not mean New Zealand’s approach is perfect, nor does it mean vaping is without risk. But it does raise an uncomfortable question. If the objective is to reduce smoking-related disease and death, why has Australia been so reluctant to fully embrace a harm reduction strategy that appears to be helping smokers transition away from cigarettes elsewhere?

The irony is difficult to ignore. At the same time Australia is battling a multibillion-dollar illicit tobacco market, criminal violence linked to tobacco profits, and stubborn smoking rates in disadvantaged groups, policymakers have devoted enormous energy to restricting access to products that many smokers view as a lower-risk alternative. Rather than making it easier for smokers to move away from combustible tobacco, Australia has often made that transition more difficult, more expensive, and more uncertain.

The tobacco wars, therefore, expose another policy blind spot. For years, the debate has been framed as a choice between fighting smoking and tolerating nicotine use. Yet harm reduction offers a third possibility: reducing the harms associated with nicotine without insisting on the immediate elimination of nicotine itself. New Zealand increasingly recognised this reality. Australia largely rejected it.

As the costs of the tobacco wars continue to mount, it becomes harder to avoid the possibility that one of the biggest policy failures was not simply creating incentives for an illicit cigarette market. It was failing to seriously embrace the most viable alternative to smoking that has emerged in generations.

Reality always gets the final vote.

And it has been voting for some time.