Australia’s growing vaping black market offers a regulatory warning Europe must heed
Released in late March, Australia’s latest federal budget numbers paint a stark picture: tobacco excise tax revenue has nearly halved since 2019, with cumulative losses estimated at A$10 billion (€5.6 billion) by 2029. Local media investigations over the past month have tied this budgetary hole to Australia’s booming tobacco and nicotine black markets and thriving organised crime, with experts warning that this illicit trade scourge reflects the unintended consequences of Canberra’s excessive vaping crackdown.
From limiting the legal sale of vapes to pharmacies to implementing sweeping vaping flavour bans, Australia’s draconian regulatory approach is fuelling a massive shift toward the illicit market for vaping and tobacco products. Such measures, disconnected from the latest scientific research, undermine public health by restricting access to safer nicotine alternatives and pushing users either back to smoking or into the hands of unregulated black-market vape suppliers.
As other countries explore new vaping regulations, the Australian experience offers a cautionary tale of a well-intentioned yet poorly-executed health strategy. Given the international evidence linking overly-restrictive vaping rules to illicit market spikes, Europe must heed these lessons and ensure its upcoming policies avoid the same pitfalls.
Canberra’s avoidable crisis
The Australian government’s overzealous regulatory approach has spiralled into what Dr James Martin of Melbourne’s Deakin University has rightly decried as a “total disaster” triggered by a fundamental mistake: vastly hiking cigarette prices while severely restricting vaping products, which are now largely sold on the black market. According to Martin, Canberra’s only escape from this self-inflicted crisis is to “legalise consumer vaping products,” adding that “if we just keep making nicotine harder to get to,” consumers will inevitably turn to the illicit trade.
From limiting vape sales to pharmacies to largely banning vaping flavours – a vital smoking cessation aid backed by a well-established body of research – Australia’s rejection of the science has spectacularly backfired. Leading physician and researcher Dr Colin Mendelsohn has cautioned that over 90% of Australian vapes now circulate illegally without safety oversight as organised crime flourishes. This harsh reality is illustrated by the hundreds of violent attacks on tobacco and vape retailers nationwide, as well the increasingly-common seizures of illicit vaping products.
Australia vs New Zealand: a tale of two strategies
Comparing Australia’s regulatory approach to that of its neighbour across the Tasman Sea offers highly-revealing insights. Martin notably cites New Zealand as the only country to have successfully introduced Australia-style tobacco taxation – a regulatory victory Wellington has achieved “by legalising vaping back in 2020.” Recent research shows that New Zealand’s adult daily smoking rate has fallen at twice the pace of Australia’s over the past seven years. Due to its more balanced approach, New Zealand has reduced its smoking prevalence from levels higher than Australia’s to significantly lower in less than five years, underscoring vaping’s essential role in tobacco cessation.
Indeed, New Zealand’s supportive vaping stance has helped the country drive smoking rates down to less than 7% and approach its smoke-free target – a sub-5% smoking rate – without triggering noteworthy black market activity. While Wellington’s dubious disposable vapes ban has raised concerns of a potential setback in smoke-free progress from experts such as behavioural scientist Dr Marewa Glover, the country has been broadly successful in mobilising vaping’s potential.
Navigating Europe’s emerging vaping landscape
With regulatory pioneers New Zealand and Australia showcasing both effective and counterproductive practices, European policymakers must draw the right lessons as they accelerate their own efforts. Australia’s black market spike is no isolated incident, as North American experiments in regulatory excess have produced similar results. For example, flavour bans in Quebec and California have sparked rapidly-expanding black markets, with over 60% of Quebec’s vapers sourcing products illegally just one year after restrictions took effect.
Concerningly, much of the EU does not seem to have gotten the memo. Roughly half of its member states have either imposed or are exploring domestic bans on flavoured vaping despite robust evidence that such measures can unintentionally increase smoking rates and overlook the importance of flavours in tobacco cessation and harm reduction. Meanwhile, at the EU-level, vaping products are expected to face new rules under the upcoming revisions of the Tobacco Products Directive and Tobacco Excise Directive.
Mirroring the situation in Oceania, initial findings on the Netherlands’s flavour ban are not encouraging: according to a recent survey, 80% of Dutch vapers now purchase from abroad and nearly 10% have returned to smoking, with a mere 2% limiting themselves to the legal ‘tobacco’ flavour. These results notably reflect Dr Glover’s research concluding that over half of New Zealand’s vapers would circumvent a flavour ban if it were implemented – including by resorting to dangerous black market products.
Looking to science for right balance
While certainly not perfect, the UK’s forthcoming Tobacco and Vapes Bill appears to offer a more nuanced, evidence-based approach to vaping. Crucially, the Bill has tenuously avoided outright bans on essential flavour options that protect smokers from tobacco relapses, although the legislative debate is ongoing.
Indeed, as British harm reduction advocate Clive Bates rightly asserts, “no one gets it right,” noting that even leading countries fall short, mired in an unfortunate combination of bans, taxation and misinformation. Despite its progressive promotion of vaping as a smoking cessation tool, the UK itself is expected to introduce certain flavour restrictions and a new vape tax, while Japan’s anti-cigarette crusade has inexplicably banned nicotine vapes in favour of heated tobacco products.
Given Bates’ insight that “nowhere in the world are we close to the frontier of optimum policy,” governments must stop imitating ill-advised international examples and instead follow robust scientific evidence. With guidance from independent experts, policymakers can create balanced, effective regulations that tackle tobacco consumption without fueling new illicit markets.
Europe now stands at a critical juncture, where thoughtful action informed by Australia’s missteps and New Zealand’s successes can prevent the health, fiscal and security risks of heavy-handed vaping regulation. Looking ahead, the continent’s leaders should adopt scientifically-grounded vaping policies, ensuring robust protection for youth and non-smokers while preserving regulated alternatives for adult smokers determined to quit tobacco.
