How $40-a-Pack Cigarettes Pushed Australians to the Black Market

A retired math teacher descended into an underground parking lot in search of her dealer, cash in hand. She walked up to an unmarked van and soon was back above ground with a carton of cigarettes. Australia now has the most expensive cigarettes in the world — a pack of midmarket cigarettes costing on average about 55 Australian dollars, or almost $40 — after a series of steep tax hikes, eight in 10 years, intended to reduce smoking.

The high prices have also helped fuel a thriving black market, now estimated to be a multibillion-dollar industry that accounts for as much as half of all tobacco sales in the country. “It’s the injustice of the situation,” said the retired teacher, Pat Felvus, 75, who said she smokes about 15 a day, all bought on the black market.

Until a few years ago she paid full price — about 50 local dollars a pack — but then began buying cheaper, illicit brands for as little as 10 Australian dollars a pack.

Australia

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