One of the craziest arguments for legalising – as opposed to decriminalising – marijuana is that ‘then the government can regulate it!’ Have they paid no attention to the history of governments regulating stuff? Let alone recreational stuff?
To the surprise of absolutely no one who paid attention to governments’ track record, states in the US that have legalised marijuana have seen the black market expand, rather than be eliminated. That’s because the burden of taxation – again, one of the inexplicable selling-points of the pro-legalisation lobby – is so high that people would rather buy illegal weed than the much more expensive stuff from a dispensary.
It’s even worse when the government gets to pretend that they’re taxing us for our own good. To paraphrase C S Lewis, those who tax us for our own good will tax us without end for they do so with the approval of their own conscience. Case in point: tobacco.
The justification for higher tobacco taxes was ‘discouraging smoking’. To a limited point, it kinda-sorta worked: for those who really wanted to quit, the high price of added taxation was an extra incentive to do so. But it’s a bludgeon of diminishing returns: the hardcore smoker, like any other addict, isn’t going to be deterred by high prices. A junkie might steal your iPhone, but a smoker can just go to the nearest illegal tobacco shop, either in the shopping centre or on the internet.
And that’s exactly what they’re doing.
The nation’s peak body for convenience stores has declared a $2bn collapse in legal tobacco sales, saying the Albanese government’s “ludicrous” reforms have handed the market to criminals and left the legacy of Health Minister Mark Butler “in ashes”.
An analysis conducted by the Australian Association of Convenience Stores, which represents almost 7500 retailers and 120 tobacco suppliers nationwide, has recorded the largest ever drop in legal cigarette sales, with a 50 per cent wipeout in the first two months of the 2025–26 fiscal year.
Stand by for public health troughers to spin this as ‘Cigarette taxes are working! Tobacco sales are down!’
It might also be tempting to laugh this off as government cutting off its nose to spite its face – no legal sales, no sweet, sweet, tax revenue – but, as ever, it’s anyone but the government paying for the government’s stupidity. Legal retailers are losing money, hand over fist.
There has been a $2bn drop in legal tobacco sales over the past four years, with the pace of decline accelerating dramatically as more smokers turn to the illicit market for cheap, non-taxed products.
That collapse has already stripped small service station retailers of half their cigarette trade in just three months this year, with warnings the government’s “ill-conceived” policies will wipe about $80,000 from the average store’s gross margin.
Like so many attempts at blanket prohibition, all the government are doing is creating a business model for criminals. Well, criminals other than politicians.
Under strict advertising laws and online sale restrictions, promoting and distributing illicit cigarettes is banned in Australia, but search results showing 13 of the top 20 hits for “cheap cigarettes Australia” are for illicit operators, compared to just four legal retailers and only one government information page, which ranks 19th.
Unlike the days of the speakeasies, or back-alley heroin peddlers, consumers don’t need to worry about nasty, adulterated crap. Black marketeers are selling genuine popular brand names like Pall Mall, Choice, Holiday, Winfield and Marlboro.
With the latest excise hike pushing the lowest price of a legal packet of cigarettes to nearly $40, AACS chief executive Theo Foukkare said criminals had seized control of the market.
The AACS claims illicit operators now control more than half of the national tobacco market, with projections suggesting that could soar to 80 per cent by 2027.
Mr Foukkare said the government’s approach, spearheaded by Mr Butler and Home Affairs Minister Tony Burke, had backfired.
“Mark Butler has been honourably waging war on tobacco since 2011 when, as a junior minister, he backed Nicola Roxon’s plain packaging laws. More than a decade later, he tried to etch his own legacy by ramping up tobacco excise, pushing legal packs of cigarettes to nearly $40 and mandating new warning labels on cigarette sticks,” he said.
“This, combined with the failed pharmacy model on vaping products, has seen tobacco and nicotine control go out the window along with his legacy looking like it will go up in ashes.
“Mark Butler promised stronger tobacco control but his legacy will be the opposite – cheap smokes, colourful packs with no health warnings, excise revenue plummeting, and Australians left exposed to bank fraud and financial scams” […]
He blames the collapse on a series of government reforms that took effect on July 1, including forcing packs down to 20 cigarettes, banning menthol and crushball products, and hiking excise on roll-your-own tobacco to eliminate its price advantage.
Wait, government getting carried away with their own, heavy-handed hubris and completely screwing the pooch? Whoever heard of such a thing!
