An expert in tobacco control says claims action is needed to curb illegal tobacco use in New South Wales are incorrect.

British American Tobacco Australia (BATA) said it commissioned research which found 14.5 per cent of tobacco consumed in Australia was illegal.

BATA is considering introducing make-your-owns, at $9 for a pack of 25 cigarettes, to curb the trend.

But Dr Becky Freeman from the University of Sydney said government surveys showed illegal tobacco use fell between 2007 and 2013, and has accused the tobacco industry of distorting figures.

"It's clear that the use of illicit tobacco has actually decreased," she said.

Dr Freeman said 3.6 per cent of smokers admitted to using illicit tobacco.

But BATA insists its figures are correct.

"Our particular figure, we stand by it," BATA's Scott McIntyre said.

"That's backed up by us going out there and going to all different locations across the country with ex-detectives doing undercover purchases."

Dr Freeman accused the tobacco industry of distorting illegal tobacco use figures to offset the impact of the rises in excise.

"The primary motivation to say that there has been an increase in illicit tobacco use is to prevent the Government from further increasing taxes and that hurts the tobacco industry," she said.

"This is completely an industry beat up.

"The Government should continue on with its taxation policy of increasing the price."

The Cancer Council NSW said according to government data and independent research, there had not been a reported increase in illegal tobacco and there was no reason for concern.

"The total amount of [illegal] tobacco seized over recent years and the number of tonnes of contraband cigarettes plus loose tobacco combined has remained stable," Scott Walsberger, from the Tobacco Control Unit at Cancer Council NSW, said.

"And use of illicit tobacco among smokers has declined in recent years."

He said there was no evidence to suggest tobacco control policies, such as plain packaging or tobacco taxes, had contributed to a rise in illegal tobacco sales.

Legal cigarettes not a safer option: doctor

The tobacco industry warned that proceeds from illegal tobacco and cigarettes were being funnelled to criminal gangs and that profits should be going to government.

"The excise system is just not having the desired effect," Mr McIntyre said.

"It's shocking people into changing their behaviour and looking for cheaper alternatives.

"We're not encouraging people to take up the habit.

"We're just saying if you're already a smoker and you're smoking an illegal product, we would rather them smoke ours and that way at least the consumer knows that they're smoking a product that has been through the right laws and standards and the Government is getting their fair share in tax."

Mr McIntyre said consumers also had greater assurances over what substances were used in legal tobacco products.

But Dr Freeman said that simply was not true.

"I find that the notion that legal cigarettes have passed some sort of safety standards completely laughable," she said.

"The cigarettes that are sold legally in shops, we actually have no idea what's in them either.

"The tobacco industry isn't required to declare what's in them."