Melbourne, Sydney most expensive in world for beer and cigarettes, study finds

A recent report by Deutsche Bank has identified Melbourne and Sydney as the world's most expensive cities for beer and cigarettes. The "Mapping the World's Prices" report, which analyzed cost-of-living data across 69 cities globally, found Australia's two largest cities topping the list for these specific goods. The comparison, drawing data from Numbeo, a crowd-sourced cost-of-living database, also examined price changes over the past decade.

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Sin taxes are a highly effective public health measure to deter people from smoking. There's no doubt that the tax has encouraged people to quit smoking. Some of our research has found that the price of tobacco products has become the main reason that people were quitting smoking or trying to quit smoking.

The report attributes the high cost of beer and cigarettes in Melbourne and Sydney largely to Australia's substantial "sin taxes." These taxes, designed to deter consumption for public health reasons, have led to significant price increases over the last decade. Melbournians are paying 89% more for five beers and two packs of cigarettes compared to ten years ago, while Sydneysiders have seen an 82% increase. Sydney also ranks second globally for the cost of a 20-pack of cigarettes, with prices rising 130% in a decade, and Melbourne ranks third with a 123% increase.

Professor Coral Gartner from the University of Queensland highlighted the effectiveness of these taxes as a public health measure, stating that the price of tobacco products is a primary driver for people quitting or attempting to quit smoking. This aligns with data from the Australian Institute of Health and Welfare, showing a decline in smoking rates over the past two decades. Laura Hunter, CEO of the Australian Council on Smoking and Health, noted that Australia now boasts some of the lowest smoking rates among high-income nations, calling it a "remarkable public health achievement."

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Australia now has some of the lowest smoking rates of any high-income country. This is a remarkable public health achievement and shows what sustained, comprehensive tobacco control can achieve.

However, the report also touches upon the issue of illicit tobacco. Despite the low smoking prevalence at 5.6%, one in three Australian smokers consumes illicit tobacco. Dr. Gartner suggests that organized crime networks, with increasingly sophisticated operations and international supply chains, are the primary drivers of this illicit trade, rather than the high prices themselves. The report implicitly contrasts Australia's high-tax, low-smoking-rate environment with countries that have lower tobacco taxes but potentially similar or higher smoking rates.

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What seems to be driving the illicit tobacco market in Australia is very much the organised crime networks and their changes in operation getting more sophisticated, getting those supply networks in place, and also there's been this overproduction of tobacco products internationally.