Tobacco Taxes and Regulations in Australia

 

Tobacco taxes in Australia are among the highest in the world. This has contributed to the country’s success in decreasing rates of daily smoking. However, smuggled tobacco undermines the success of public health measures.

Tobacco and tobacco-related products that are not manufactured in Australia are subject to duty and taxes when they enter the domestic mail stream. These taxes are indexed to rises in average weekly ordinary time earnings.

Made in Australia

As no 100g tobacco Australia company is listed on the Australian Securities Exchange, it is difficult to obtain detailed information about local operations. However, the two large international tobacco companies, Philip Morris International and British American Tobacco Australia, do provide some local information in their annual reports and on their websites. These reports are supplemented by market research data and industry publications.

Following the closure of Philip Morris and BATA’s manufacturing facilities in 2014 and 2015, respectively, the Australian tobacco market became a wholesaling market. This resulted in a massive spike in revenue for the industry. Imperial Tobacco dominates the tobacco product wholesaling market with a share of over 48%. Its major cigarette brands include Winfield, Benson and Hedges, Dunhill, and Holiday. It also dominates the roll-your-own tobacco market with a share of over 28%.

It is illegal to import tobacco products, leaf or refuse into Australia without a permit. If you do not have a permit, Customs will seize and destroy the product. You can import tobacco through a freight forwarder or fast-freight courier. You cannot import tobacco products, leaf or refuse through the international mail service, despite having a permit to do so.

Made with 100% natural tobacco

The illicit tobacco market is linked to other illegal activities and poses risks to human health and the environment. Illicit tobacco is often produced using sub-standard production processes, which can expose consumers to poisons such as formaldehyde and traces of rat faeces. Smuggling tobacco also raises concerns about biosecurity and the risk of bringing in diseases and pests. Illicit tobacco is a key source of profits for organised crime, which uses proceeds from the business to fund criminal activity.

The AIHW has published several comprehensive studies of the costs of smoking to Australian society, including those arising from excess health care utilisation and loss of productivity. This includes studies that estimate lifetime health care costs of smokers compared to non-smokers; those that report the societal cost of tobaccorelated disease; and those that provide estimates of the economic benefits of reduced tobacco use in Australia.

The Department of Home Affairs has published a list of prohibited items, including cigarettes and other tobacco products such as molasses tobacco and heat-not-burn tobacco. Importers must have a permit and complete an import declaration for any prohibited items that are imported into the country. They may be allowed to store these products for short periods in a licensed customs depot as transhipment cargo. However, they must pay the relevant duty and taxes before the tobacco leaves customs control or enters home consumption.

Made with natural flavours

Hickory smoke powder is made in Australia and is an excellent additive for any product that requires a natural smoky flavour. It contains no artificial ingredients and comes in a sealed bag. It is also safe to use with foods and drinks that adsorb aromas. However, it is not intended for children and should be kept in a sealed container away from foods that adsorb flavours. Laws passed in 2017 have prohibited tobacco products with characterising aromatic agents, which include additives derived from fruits, spices, sweeteners, aromatic plants, alcohol, chocolate and menthol.

Made with a menthol flavour

The flavouring of tobacco products increases their attractiveness, addictiveness and toxicity. Therefore, regulation of flavouring additives may help reduce these properties. The 2017 partial guidelines for implementing Article 9 of the FCTC recommend prohibiting or restricting ingredients that are predicted to increase palatability, such as sugars, sweeteners, spices and flavourings including menthol.

The sale of tobacco products containing characterising flavours was banned in the European Union (EU) by the second Tobacco Product Directive (TPD2) in 2014. The ban also applied to RYO cigarettes and roll-your-own tobacco. The ban did not apply to flavoured e-cigarettes.

At October 2022, 48 factory-made cigarette brands and sub-brands were available on the Australian market. Supplementary Table 10.7 lists these brands by company, price segment, brand name and pack size. In addition, it lists the number of unique variant and pack size combinations offered by each manufacturer. This information will be useful when assessing the tobacco industry’s competitiveness. Tobacco excise duty rates are indexed each March and September in accordance with the average weekly ordinary time earnings (AWOTE) indexation factor.