How Australia's world-first crackdown on smoking - introducing plain packets and hiking them beyond $50 - has backfired: Here's why

Australia's world-first crackdown on smoking has had a series of unintended consequences as illegal tobacco sales reach epidemic proportions and Chinese-made disposable vapes flood the market.

And the proliferation of illegal products easily available in suburban shops across the nation has seen a disastrous rise in teenage smoking and nicotine vaping not seen in other countries around the world.  

When the laws were introduced in 2012 by the Labor government, they were hailed as a historic win against Big Tobacco.

The laws saw plain packaging introduced and huge increases in taxes that will see the average packet pass the $50 mark in 2026. 

The measures were supposed to be a victory in health policy intended to stamp out nicotine addiction in future generations of Australian children.

The plain packaging now includes pictures of extreme disease caused by smoking, such as gangrenous toes and rotting gums.

The most disturbing pack features Bryan Curtis, a 34-year-old American who smoked two packets of Marlboro Reds a day for 20 years, close to death from lung cancer.

The federal government also removed any point-of-sale advertising and cigarettes must be hidden from view at all times.

But as the legal sale of tobacco has been squashed under draconian laws and taxation, the sale of illegal tobacco and vapes has flourished.

Smoking and nicotine-based vaping among 14-17 year olds in Australia has multiplied six-fold and 15-fold in the last five years.

And according to a leading academic and researcher in smoking cessation and tobacco harm reduction, it's due to the availability of black market nicotine products from suburban shops.

The rise in nicotine consumption among Australian teens  has coincided with a fall in smoking in the 15-18 years age group in the US, the UK and New Zealand.

Dr Colin Mendelsohn, who founded the Australian Tobacco Harm Reduction Association, cited alarming data from the Roy Morgan Institute and the Cancer Council of Victoria.

The statistics say that in 2018 just 2.1 per cent of Australians aged 14-17 smoked, and 0.8 per cent used vapes - mostly nicotine vaping.

By 2022, 6.7 per cent in this age group were smoking and 11.8 per cent were vaping.

In the first quarter of 2023, the number of teenage smokers had risen to 12.8 per cent and vapers were at 14.5 per cent, which Dr Mendelsohn said included a significant number using high nicotine concentrated vapes.

He told Daily Mail Australia the rise was due to the proliferation of black market tobacco/nicotine products.

From the sweet smell of vapes outside offices, to empty packets of 'branded' illegal tobacco on the streets, the evidence of black market smoking is everywhere.

And despite Australia 'declaring war' on vapes and cigarettes with tougher smoking bans for pubs, clubs, more young people are lighting up. 

The statistics show a staggering 30 per cent of Aussies between 14 and 30 have used a vape.

While there's no data on how many smokers are turning to illegal tobacco, the proof they are is everywhere: from the shops selling them to the people smoking them.

One Sydney smoker, Tom, regularly buys a packet of black-market cigarettes for $12 - or splashes out and pays $20 for an illegal packet of Marlboros.

He says they are sold in every suburb - and blames the federal government's policy for their rise.

'I know hardly anyone who buys legitimate cigarettes; and I don't blame the little stores from selling them.

'Go to any pub and have a look around at the cigarette packets on the table - few are the legal, plain-package variety.'

Tom said the illegal cigarettes tasted the same as the legal ones because 'they all come out of the same factory'.

'Marlboro are Marlboro, they are just packaged according to the rules of the country. A $1 a packet in Cambodia is the same as a $40 a packet in Australia.'

With rising living costs, the temptation to do so is increasingly mainstream.

Daily Mail Australia has obtained catalogues with price lists supplied to prospective suburban retailers of cigarettes sold with brand names such as Marlboro, Benson & Hedges, Winston and Camel.

A catalogue of cigarettes from a company in Shenzhen, China which manufactures counterfeit cigarettes in Cambodia, is offering the smokes for $260 a carton, or ten packets of 20 cigarettes.

The packaging, which carries the brand name and emblem, and doesn't have the health warnings Australian laws mandate, indicate the cigarettes are sold without excise and are part of a criminal enterprise.

The price compares with legitimate Marlboros being sold for between $339 and $446.50 for a carton of ten packets each of 20 Marlboro Gold cigarettes.

To put the prices into context, a pack-a-day smoker (20 pack) would currently spend $14,600 on cigarettes per year, compared with $9,490 for the Cambodian smokes.

The Australian Federal Police, the Australia Tax Office and Australian Border Force spend considerable resources to combat the brazen tactics of Australia's illicit tobacco racket.

The racket means billions of dollars of potential tobacco excise will never reach government coffers.

But as the price of food, electricity and fuel soar, the illegal tobacco industry will continue to make a mockery of government policy of plain packaging and steep tobacco excise.

The health.gov.au website states that 'The Australian Government taxes tobacco products to make them less affordable through excise on tobacco products' and cites its Illicit Tobacco Taskforce set up in 2018.

The ITTF says it does this 'by proactively targeting, disrupting and dismantling serious actors and organised crime syndicates that deal in illicit tobacco'. 

But, meanwhile, the trade goes on.

Illegal operators in South Australia have been identified as particularly shameless marketers of illegal cigarettes and vapes.

The SA government went on an enforcement blitz on illegal vapes in June, announcing stringent new licence conditions over nicotine e-cigarettes.

These require retailers to show proof vaping products being sold are nicotine-free, and to provide information about their e-cigarette suppliers, importers or manufacturers.

Enforcement blitzes over the previous financial year resulted in the seizure of about 15,000 illegal nicotine vapes.

In September, the NSW government announced it would spend $6.8million in cracking down on illegal vapes.

From January 1 to June 30 this year, NSW Health seized 187,000 products, up from 61,000 in the same period in 2022.

The health body has also conducted more than 5,000 inspections and seized about 369,000 nicotine vapes and e-liquids with an estimated street value of more than $11.8million.

According to a tobacco industry source, illegal products now account for about 25 per cent of all tobacco consumed, and the percentage is rising.

Just days ago, a top health official blasted e-cigarette makers as 'vendors of death' as Victoria mulls over introducing a tobacco licensing scheme that could make buying the items a lot harder. 

Tom said despite the will of the Federal Government to crack down on the illegal trade, he did not believe they had the resources.

An Australian Post Office contact told him that 'tonnes and tonnes' of illegal tobacco and cigarettes are mailed into the country each year, but that 'like illicit drugs' plenty of tobacco still 'made it through'.

Dr Mendelsohn criticised new legislation proposed by the Health Minister Mark Butler - to ban disposable single-use vapes, and make personal importation of vapes or e-liquids from overseas - as likely to drive up the black market.

'History has repeatedly demonstrated that blanket bans and punitive measures simply don’t work,' he said.

'Butler’s approach will only fuel the black market and drive it underground. The losers are adult smokers seeking safe and effective alternatives and young people who will continue to have access to illegal products. 

'The winners are organised crime and Big Tobacco.'