In the land down under, a burgeoning illicit market for vaping products paints a stark portrait of failed prohibition. Australia’s stringent anti-vape stance has inadvertently but predictably nourished a thriving underground economy, with ramifications echoing the lessons of 20th-century drug bans.
The intricate web of negative consequences underscores the urgent need for a paradigm shift towards regulation and harm reduction. On February 12, some colleagues and I released a briefing paper to launch a campaign to raise awareness of these self-inflicted problems.
Australia is the only country in the Western world to require a nicotine prescription to vape legally. The restrictions are so harsh that they amount to de facto prohibition. This has led over 90 percent of Australia’s 1.7 million adult vapers to give up on legal pathways and purchase their vaping products from the illicit market.
Measures ostensibly intended to safeguard public health are putting people at risk in a number of ways beyond the sabotage of smoking cessation.
This market is not a fringe phenomenon but a mainstream crisis, with an estimated 120 million disposable, unregulated vapes imported illegally from China each year. Products are brazenly sold in retail outlets and across social media platforms, without consumer protections, to both adults and minors.
The irony is stark: Measures ostensibly intended to safeguard public health are putting people at risk in a number of ways beyond the sabotage of smoking cessation.
Illegal vapes are a highly profitable commodity. A disposable vape can be purchased from China for as little as AU$3 and sold in Australia for AU$35. Given those huge margins and the impossibility of enforcing such a widespread market, the incentives to participate are strong.
By nurturing this lucrative domain for illegal enterprises, Australia has created a battleground for organized trafficking networks. Firebombing, public executions and daylight robberies signify an intensifying turf war among various factions, from groups with roots in the Middle East to outlaw motorcycle gangs. These acts of violence can involve the exploitation of young, marginalized recruits who carry out attacks, and their subsequent criminalization.
Isolated law enforcement busts are often celebrated in the media, but represent a drop in the ocean. Research has shown that illicit markets, in Australia and overseas, have rarely been significantly disrupted by enforcement or crackdowns. This has been the case with alcohol, with other drugs, with sex work and more. Further research has found that drug-law enforcement, by creating power vacuums and instability in illicit markets, can increase associated violence.
Australia has a vast coastline, and the Australian Border Force has nowhere near the resources to constantly patrol it all.
Even the head of the Australian Border Force (ABF) has warned that banning vapes at the border, a policy being implemented right now, won’t eradicate the illicit market. Already, he estimated, the ABF was only managing to detect a quarter of illicit drugs making their way into Australia. That’s likely an overestimate.
The ABF’s limited success in intercepting illegal vapes illustrates the futility of trying to impose this type of border control here. Australia has a vast coastline, and the ABF has nowhere near the resources to constantly patrol it all. The force scans just 1.4 percent of the 6.3 million containers that arrive in Australia by sea every year. The rarity of prosecutions highlights the low risk of trafficking and the failure of enforcement to make any significant dent.
The parallels with past prohibitions are striking. Heroin was banned in Australia in 1953 but is widely available. Illicit tobacco, avoiding heavy taxes, is now estimated by industry sources to comprise 23.5 percent of the total tobacco market. In 2022, a ban on tobacco in Bhutan was repealed after it led to a thriving illicit market, associated violence and corruption, and increased tobacco use.
Banning drugs doesn’t stop people using them. Instead, it drives them underground, exposing them to additional risks from unregulated products and markets. Sellers always rise to meet the demand and find creative solutions, regardless of legal barriers. Australia’s failure to learn from historical precedents suggests a disconcerting disregard for evidence-based policy-making.
Easy access to unregulated sales channels for minors undermines the key rationale of Australia’s prohibitionist approach.
According to the Iron Law of Prohibition, banned substances not only become more potent and dangerous but also more accessible to vulnerable populations, such as youth. A tragic example of this is the outbreak of the severe and sometimes fatal lung injury misnamed as “EVALI” (E-cigarette, or Vaping, product use-Associated Lung Injury) in North America in 2019-20. It resulted from illicit THC vapes, adulterated in the unregulated supply chain with vitamin E acetate.
Easy access to unregulated sales channels for minors undermines the key rationale of Australia’s prohibitionist approach. Youth vaping rates in Australia remain similar to New Zealand and other Western countries with a more liberal approach. And making vapes difficult to access, if it were achieved, would risk perpetuating youth smoking, which is far more dangerous.
The economic implications of vaping prohibition are also substantial. A huge illicit market represents a significant loss in potential tax revenue for the government, funds that could support public health initiatives.
The disconnect between public opinion and policy is another critical aspect of the vaping debate. A recent survey found that 88 percent of Australians support regulating vapes as an adult consumer product, like tobacco and alcohol. This growing public sentiment could serve as a catalyst for policy change, urging lawmakers to reconsider the current prohibitionist stance.
The only way to significantly reduce an illicit market is to replace it with a legal, regulated one.
The contrast between Australia’s vaping landscape and that of countries like New Zealand, where a regulated market has effectively deterred a significant illicit market, is stark. Illicit vape markets are well documented in the United States and United Kingdom, but they’re much smaller in proportion because vapes are legally available at retail outlets.
The solution to Australia’s vaping dilemma lies in following New Zealand’s vapes blueprint by embracing regulation over prohibition. The only way to significantly reduce an illicit market, as the government would presumably wish to do, is to replace it with a legal, regulated one—with products sold by licensed legal outlets, with quality control and age verification. This approach would ensure product safety, curtail violence, reduce youth access and align Australia with global best practice in harm reduction.
The narrative of vaping in Australia is a further cautionary tale about the perils of prohibition. As well as being a harsh lesson for Australian regulators, it should also serve as a warning to other countries considering their own vape policies.