The Costs of Driving Vape Markets Underground

A new report by Professor Sinclair Davidson from RMIT University has estimated the staggering costs of prohibitions placed by governments upon reduced risk nicotine products. This report examines how prohibition-style nicotine policies in Australia, Brazil, Belgium, the Netherlands, and Denmark have fuelled black markets, weakened regulatory control, and imposed substantial economic costs. Professor Sinclair Davidson finds that bans and severe restrictions do not eliminate demand, but instead shift consumers toward criminal and informal sellers while depriving governments of tax revenue and legitimate businesses of customers.

Key findings include the rapid growth of organised crime and violence in Australia, the persistence of a fully illicit market after fifteen years of prohibition in Brazil, widespread non-compliance following disposable and flavour bans in Belgium and the Netherlands, and a doubling of social-media vape purchases among Danish teenagers. The report estimates recurring annual regulatory-failure costs of AUD $12–20 billion in Australia, R$3–15 billion in Brazil, €250 million–€1.2 billion in Belgium, €500 million–€3 billion in the Netherlands, and DKK 250 million–1.5 billion in Denmark.

The report may be downloaded in full HERE.