A new study published in Addiction lays it out plainly. Australia adopted punitive tobacco taxes and blocked consumer access to less harmful nicotine alternatives. The result: an estimated 55% of all tobacco sold in Australia and 95.7% of all vapes are now illicit. Nicotine consumption is at a record high. Smoking has not collapsed. The illicit nicotine trade is now worth an estimated $5.6 billion, and over 100 firebombings of storefronts in Victoria alone have been linked to criminal groups fighting for market control.

The authors’ conclusion: Australia should allow easier consumer access to less harmful alternative nicotine products to bring illicit markets under control. 

Now look at what the European Council and Commissioner Wopke Hoekstra are proposing for Europe.

The latest Tobacco Excise Directive proposal would increase minimum retail price excise taxes by 150% on cigarettes and 50% on rolling tobacco, while introducing new minimum excise taxes of 55% for heated tobacco sticks and 30% for e-liquids, regardless of nicotine concentration. For nicotine pouches specifically, the proposal sets a minimum rate of 50%, a 410% increase over current Swedish rates. Effectively, products that public health bodies in the UK, Sweden and elsewhere endorse as tools to help people quit smoking would be priced out of reach or taxed into irrelevance.

Some member states want to go even further, pushing for higher rates, stricter controls, and even full bans on products like nicotine pouches. The Commission, for its part, seems to treat Australia’s disaster not as a warning but as a policy model.

The numbers Brussels already has in front of it should be enough. According to KPMG data cited in an industry letter to von der Leyen and Hoekstra, 52 billion illicit cigarettes are consumed across Europe each year, costing governments €19 billion in lost revenue. France, often cited as a success story for tobacco taxes, now has a black market covering a third of its tobacco market. The EU illicit trade does not need encouragement. It needs less of it.

The Australia paper is clear on where this leads. Punitive taxes and restricted access to less harmful alternatives do not reduce nicotine consumption. They shift it underground, hand the market to organised crime, and push some people back to cigarettes.