Australia’s approach to nicotine regulation has become a subject of intense debate, with critics arguing that its current framework has failed to distinguish between more and less harmful nicotine products. The sharp increases in tobacco taxes and a ban on consumer vaping have fueled an expansive black market, leading to criminal activity, regulatory gaps, and unintended public health consequences. While Australia has long been a global leader in tobacco control, its restrictive policies have begun to resemble a de facto “War on Nicotine”, prioritizing enforcement and taxation over harm reduction.
A more balanced regulatory framework, which includes risk-proportionate taxation and legal access to less harmful alternatives like nicotine pouches and vaping products, could help reduce smoking rates while avoiding the negative consequences of an unchecked black market.
Tobacco Taxation in Australia: A Policy at a Crossroads
Tobacco has been subject to heavy taxation in Australia for decades, justified on both public health and revenue-generation grounds. Since 2010, the country has implemented a series of aggressive tax increases, causing the price of a pack of cigarettes to rise by over 300%. These high prices were intended to discourage smoking, but they have also driven a parallel expansion of the illicit tobacco trade.
According to the Australian Taxation Office, the proportion of the tobacco market made up by illicit sales rose from 4.9% in 2014 to 14.3% in 2023. In its own guidance, the World Health Organization (WHO) warns that excessive tobacco taxes can incentivize smuggling and the illicit trade, undermining tax policy objectives. Despite this, Australia continues to raise tobacco taxes, even as revenue collection falls short of government projections due to increased black market activity.
This raises an important question: Is taxation alone an effective tool for reducing smoking rates?
Evidence from Sweden, where nicotine pouches and snus are widely available, suggests that a different approach may be more effective. Sweden has one of the lowest smoking rates in Europe and is on track to become the first Western country to achieve a smoke-free status (below 5% daily smoking prevalence). Unlike Australia, Sweden has regulated and taxed nicotine alternatives proportionate to their risk, allowing adult smokers to transition to lower-risk products rather than driving them toward illicit alternatives.
Vaping Bans in Australia and the Growth of the Black Market
In addition to high tobacco taxes, Australia has also pursued one of the strictest vaping policies in the world. Since 2023, a series of reforms have banned consumer sales of vapes, allowing access only through pharmacies with a prescription. While intended to curb youth vaping, this policy has created a thriving black market, where most vapers—96.1% according to the National Drug Strategy Household Survey—obtain their products illegally.
Unlike legally regulated products, black market vapes lack quality control measures, potentially exposing consumers to higher concentrations of harmful chemicals. The absence of regulatory oversight means that underage users may have greater access to illicit products than they would under a legal, controlled framework.
A more effective approach would recognize the public health benefits of transitioning smokers away from combustible tobacco while ensuring that nicotine alternatives are properly regulated and taxed proportionate to their risk.
The Role of Nicotine Pouches and Other Alternatives in Australia
While much of the debate in Australia has focused on cigarettes and vaping, alternative nicotine products—such as nicotine pouches—have received less attention. However, they represent a significant harm reduction opportunity that should be part of any comprehensive nicotine policy.
Since 1991, Australia has banned the sale of oral nicotine products, including chewing tobacco and snuff. In 2008, nicotine was classified as a poison by the Therapeutic Goods Administration (TGA), with exceptions only for smoking tobacco and approved therapeutic products. This regulatory framework has resulted in a paradox where more harmful nicotine products, such as cigarettes, remain widely available, while smokeless alternatives with lower health risks are restricted.
Many experts describe this as “perverse regulation”, a term used to highlight how combustible tobacco remains more accessible than reduced-risk alternatives. Countries that have embraced harm reduction approaches, including Sweden and Norway, have seen dramatic declines in smoking rates due to the availability of nicotine pouches and snus.
A risk-proportionate approach to taxation and regulation would ensure that products like nicotine pouches are available as alternatives for adult smokers while preventing youth uptake through strict marketing and sales controls.
Policy Recommendations for a More Balanced Approach
A more effective nicotine control strategy in Australia would incorporate harm reduction principles, recognizing that not all nicotine products carry the same level of risk.
Policy recommendations include:
- Establishing a legal, regulated market for less harmful nicotine products, including nicotine pouches and vaping products.
- Implementing risk-proportionate taxation, where nicotine products are taxed according to their relative health risks, rather than applying a one-size-fits-all approach.
- Mandating clear labeling and product safety standards to ensure that consumers have accurate information about their nicotine options.
- Introducing comparative health warnings, helping smokers understand how transitioning to less harmful alternatives can improve their health compared to continued smoking.
A Path Forward for Nicotine Policy in Australia
Australia’s current regulatory approach has unintended consequences, including the expansion of the black market, increased criminal activity, and missed public health opportunities. By failing to differentiate between more and less harmful nicotine products, the country has undermined harm reduction strategies that could otherwise accelerate declines in smoking rates.
The experience of Sweden demonstrates that providing access to regulated harm reduction alternatives can lead to lower smoking rates and better public health outcomes. If Australia recalibrates its nicotine control policies, incorporating risk-based taxation and regulated access to safer alternatives, it could more effectively reduce tobacco-related harm while avoiding the pitfalls of prohibitionist policies.
Policymakers must move beyond a punitive approach and consider a framework that aligns public health goals with regulatory efficiency, ensuring that adult smokers have access to the tools they need to quit combustible tobacco while minimizing unintended negative consequences.
Adapted from: “Fanning the flame: analysing the emergence, implications, and challenges of Australia’s de facto War on Nicotine” by Dr. James Martin and Dr. Edward Jegasothy, published in the Harm Reduction Journal (2024).
