NSW Introduces $1.5 Million Fines and Seven Years Prison for Selling Illicit Tobacco

The legislation marks one of the strongest anti-illicit tobacco measures introduced in Australia to date.

A photo illustration of black market cigarettes displayed in Melbourne, Australia on March 26, 2025. Asanka Ratnayake/Getty Images

The New South Wales (NSW) Labor government has introduced new legislation to parliament to address the growing problem of illicit tobacco and illegal vaping.

The Tobacco Legislation (Closure Orders) Amendment Bill 2025 (pdf) imposes fines of up to $1.5 million or seven years in jail for the sale or commercial possession of illicit tobacco.

The Bill also allows for closure orders of up to 90 days, or up to 12 months in more serious cases, for sites that sell illegal vapes and illicit tobacco.

Illicit tobacco refers to tobacco that does not comply with packaging and health warning requirements set by the Federal government.

Daily Smoking Has More than Halved

In Parliament on Aug 6, Health Minister Ryan Park said tobacco use continued to place a “substantial burden” on the NSW health system.

Daily smoking has more than halved over the past two decades—from 17.5 percent in 2004 to 6.9 percent in 2024.

Still, Park said hospital admissions and smoking-related deaths remained “unacceptably high.”

“The government wants those rates to continue to decline.  However, we are now faced with a flourishing illicit tobacco trade that threatens to reverse what I think is well over half a century of hard-fought wins in reducing tobacco consumption,” he said.

He added that the Public Health (Tobacco) Act 2008 was no longer strong enough to confront the “elaborate and growing scale” of underground illegal tobacco networks, which he said were “spreading like wildfire across suburbs, towns and communities.”

“The illicit tobacco industry is not a minor nuisance; it is a growing underground industry that feeds organised crime, undermines public health efforts and disadvantages legitimate retailers,” Park said.

“The purpose of the Bill is simple: We want to disrupt illegal tobacco networks by hitting illegal operators hard with strong, targeted and enforceable laws.”

Illegal Tobacco and Vaping Shops to be Closed

The legislation gives authorities the power to close sites where illicit tobacco or illegal vapes are being sold, or are likely to be sold.

“To be clear, this means the complete closure of the premises, not just a prohibition on selling tobacco at the premises,” Park said.

A fine will also be imposed on those who enter an illicit tobacco or illegal vaping site.

“The maximum penalty for entering these premises will be $82,500 for a first offence and $137,500 for a subsequent offence,” Park said.

In the most serious cases, Park said, the maximum penalty for possessing 125,000 cigarettes would be seven years in prison, a $1.54 million fine, or both.

In a statement, Park said the new laws would give the government the power to shut down illicit tobacco and vape stores and “disrupt this criminal business model.”

“These reforms will send a clear message to anyone selling illegal tobacco or vaping products, which is: get rid of these products or they will be seized, your store will be closed, and you will be prosecuted to the full extent of the law,” he said.

Bipartisan Support

Opposition Shadow Health Minister Kellie Sloane also introduced her own private member’s bill to deal with illicit tobacco.

She introduced the Public Health (Tobacco) Amendment (Illicit Tobacco) Bill 2025 to the Legislative Assembly on Aug. 5.

In a conversation with NSW Liberal colleague James Griffin on Instagram, Sloane outlined how her bill would crack down on illegal tobacco sales.

“This Bill is aimed at removing some of these shops from your street corners that we know that you want back,” Sloane said.

“We are going to introduce for the first time, closure orders, which will shut down the dodgy operators.

“The other thing we are going to do is give landlords the power to terminate leases without any consequences if there’s a dodgy operator there. And finally, some of the toughest penalties in the country.”

NSW Premier Chris Minns acknowledged Sloane for her contribution in parliament on Aug. 6.

“We value input wherever it comes from. The Shadow Minister has contributed to productive debate. We appreciate it,” Minns said in parliament (pdf).

He also noted that Queensland was in the process of increasing penalties and said he did not want illegal behaviour or black-market trade to migrate into NSW.

In late July, the NSW Opposition claimed the Minns government had adopted its lead on cracking down on illicit tobacco and vaping products.

“We’ve been calling for this for months,” Opposition leader Mark Speakman said.

“Communities knew it. Small businesses knew it. Parents knew it. And now finally, the Premier knows it.”