Australia is grappling with the unintended consequences of its more than decade-long attempt to tax nicotine into extinction — a giant black market controlled by organised crime. The cost of legal tobacco has trebled since December 2016, with excise accounting for more than 70 per cent of the price. A pack of legally sourced cigarettes now officially costs almost A$60 — the world’s most expensive — and many of the country’s 1.3mn smokers opt instead for illegally imported brands that cost about one-fifth of the price.

The black market accounted for around 55 per cent of the overall cigarette market last year, Australia’s tobacco regulator has estimated. Australians spend A$8.5bn a year on illegal cigarettes and vaping products, according to criminology professor James Martin — twice as much as the combined spend on cannabis, cocaine, ecstasy and heroin. “Right now, based on market share, organised crime effectively is Big Tobacco in Australia,” said Martin.

The situation has reached “breaking point”, according to a Senate report into the illegal tobacco market, which recommended an immediate pause of further tax rises. The government has stood firm. Health minister Mark Butler told the ABC broadcaster: “We’re not particularly interested in thought bubbles.” The rising cost of smoking had provided an incentive for more people to quit, said associate professor Ryan Courtney, with smoking rates in 2025 down to 5.6 per cent.

The boom in organised crime has shifted focus from health to law and order. Arson attacks have been rife in Melbourne and Sydney, with a 27-year-old woman dying in a fire last year linked to gangs. The Senate report referred to three deaths linked to this violence.