Convenience Stores Urge Lower Tobacco Excise Tax

Industry leaders are calling for federal tax cuts to curb the growing black market for illegal tobacco products.

Updated on Oct. 15, 2026 in Asthma

Convenience Stores Urge Lower Tobacco Excise Tax

Live Poll

Should the federal government reduce tobacco excise taxes to curb the black market?

The Australian Association of Convenience Stores is lobbying the federal government to reduce tobacco excise to combat the rising black market. This follows warnings that illegal sellers are undercutting regulated retailers across the nation.

Why it matters

High excise taxes on legal tobacco are driving consumers to the black market, where organized crime groups sell unregulated products. Retailers argue that federal policy changes are necessary to neutralise the competitive advantage held by illegal traders.

The New South Wales government expects to shut down 500 retail stores involved in the sale of illegal tobacco. The exact scale of the black market remains difficult to quantify as illicit operators continue to move and restart business elsewhere.

The players

Australian Association of Convenience Stores

This national industry body represents the interests of convenience store owners and operators across Australia.

Ryan Park

He serves as the New South Wales Health Minister and has been instrumental in calling for federal regulatory reform regarding tobacco taxes.

Jim Chalmers

As the Treasurer of Australia, he is responsible for managing federal economic policy and the national budget.

The details

Illegal tobacco retailers utilise both physical shops and online platforms to sell products at prices lower than taxed alternatives. Officials note that even as authorities enforce closures, these operations frequently reappear in new locations to maintain their illicit supply chains.

December 2026: Federal Treasurer Jim Chalmers will present the Mid-Year Economic and Fiscal Outlook report.

Health Landscape

This dispute marks a critical shift in the debate surrounding the tobacco excise tax, which has traditionally been used as a primary lever to reduce public smoking rates. The rise of the black market suggests that current pricing strategies are inadvertently fostering large-scale illicit networks.

While the debate focuses on retail policy, the persistence of the illegal tobacco trade complicates public health efforts to reduce smoking prevalence. Consumers should remain aware that unregulated tobacco products often bypass safety standards and health regulations.

The takeaway

The struggle between high tobacco taxes and illegal trade highlights the complexities of using fiscal policy to influence public health outcomes. Readers should be cautious of purchasing cheap, unregulated tobacco as these products often lack any health or quality oversight.

What happens next

Federal Treasurer Jim Chalmers is scheduled to deliver the Mid-Year Economic and Fiscal Outlook in December 2026, which may address future tax policy.