The illegal cigarettes and vapes versus the high federal government tobacco excise debate entered another round yesterday when the NSW Government introduced the Public Health (Tobacco) Amendment (Landlord Offences) Bill 2025 into parliament.

The new legislation will create an offence for commercial landlords who knowingly permit premises to be used by tenants to sell illicit tobacco and illegal vapes.

The new offence will carry a maximum penalty of 1 year imprisonment, a fine of $165,000 or both.

Australia's former Deputy Chief Medical Officer, Dr Nick Coastsworth, said on X, "Surely the Albanese government can’t ignore this any more. Australian smokers are being forced by tax policy into funding organised crime. And all the while, cheap cigarettes are available to a now growing group of smokers. Disastrous public health policy."

Sydney 2GB radio host Ben Fordham said he obtained documents that normally only tobacco companies see. He painted a picture over four years and forecasts more growth of illegal tobacco sales in 2026:

2022: Legal Tobacco Sales = 11 billion and Illegal Tobacco Sales = 3.1 billion

2023: Legal Tobacco Sales = 8.9 billion and Illegal Tobacco Sales = 3.5 billion

2024: Legal Tobacco Sales = 6.5 billion and Illegal Tobacco Sales = 4.3 billion

2025: Legal Tobacco Sales = 3.5 billion and Illegal Tobacco Sales = 6.6 billion

2026: Legal Tobacco Sales = 1.9 billion and Illegal Tobacco Sales = 8 billion (predicted)

Rather than look at the tobacco excise, both the federal and state governments are still trying to win the battle against organised crime by increasing the fines and prison sentences through legislation changes.

The new offence in NSW, will target landlords who are aware of tenants conducting illicit tobacco and vaping goods businesses from the premises and, instead of notifying the appropriate authorities or taking steps to evict the tenant, knowingly permitting this illicit activity to continue.

This proposed legislation was informed by engagement with key stakeholders, including three roundtables with landlord representatives, retailers, and health advocates, consultation with partner government agencies, and a public ‘Have Your Say’ survey. 

It comes as NSW Health and NSW Police have begun closing down illicit tobacco and vaping stores this month under the NSW Government’s tough new laws.

From 1 Jan 2025 to 27 October 2025, NSW Health Inspectors conducted around 1,260 retailer inspections and seized more than 11.8 million cigarettes, over 2,000kg of other illicit tobacco products and around 170,000 illegal vaping goods with a combined estimated street value of around $18.9 million.

In the period 1 January to 27 October 2025, the NSW Ministry of Health has finalised 17 prosecutions with the courts imposing a total of $597,200 in fines related to e-cigarette and tobacco offences. There are currently 27 prosecutions, inclusive of the District Court appeal, before the Courts.

The legislation builds on recent reforms that target the illicit tobacco and illegal vaping market, including:

• a new offence for the possession of a commercial quantity of illicit tobacco with a maximum penalty of over $1.5 million and 7 years' imprisonment, or both
• new penalties for the sale of illicit tobacco with a maximum penalty of over $1.5 million and 7 years' imprisonment, or both
• the introduction of short-term (up to 90 days) and long-term (up to 12 months) closure orders for premises selling illicit tobacco, illegal vaping goods, or selling tobacco or non-tobacco smoking products without a licence 
• new offences and penalties for anyone who breaches these closure orders, including for entering closed premises or selling products from closed premises
• new lease termination powers for landlords where a closure order is in place
• new nation-leading offences for falsely claiming to be licensed, resisting seizure, and attempting to retake seized products.

Minister for Health Ryan Park said, "This bill recognises and reinforces the important role that landlords need to play against the sale of illegal tobacco and vapes.

“This measure will further minimise the opportunities for illegal tobacco and vape sales to flourish.

“We know that the vast majority of landlords do the right thing – but those bad actors out there not only undermine legitimate business, they also expose communities to criminal activity.

“These penalties are the result of extensive consultation and will strike a fair and reasonable balance that ensures we target landlords who are knowingly permitting illegal activity.”

The big question is who will win this battle: the government or organised crime?