John MacDonald: What to do about the illegal tobacco trade

Here’s a stat for you: 25 percent of cigarettes sold in New Zealand are from the black market.

They’re being smuggled into the country and criminals are making millions selling them on Facebook Marketplace and construction sites. All over the place. And you probably don’t have to go far to find a dairy selling them, either.

That figure has been put out by the tobacco industry in New Zealand. Although, there was an expert saying this morning that he reckons it’s not quite as bad as the tobacco companies are saying.

Either way - whatever the figure actually is - there are smokers balking at the cost of a packet of cigarettes and pouches of tobacco and they’re quite happy to buy the illegal stuff.

And I reckon the time has come to have a re-think about how we’re dealing with cigarette smoking.

Because the approach that’s been taken so far - aside from treatment programmes and all that - has largely been about punishing people in the pocket if they want to smoke.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:12):
Here's a stat for you. What about this. Twenty five
percent of cigarettes sold in New Zealand are from the
black market twenty five percent, and they're being smuggled into
the country and the crims are making millions selling them
on Facebook marketplace, selling them at construction sites all over
the place. And let's be really, you probably don't have
to go too far to find a dairy selling them either.

(00:36):
This figure, it's been put out by the tobacco industry
in New Zealand, although there was an expert talking to
Mike this morning saying me reckons or it's not quite
as bad as what they're saying. Either way, Let's not
get too for us to about figures. Either way, what
it means is that there are smokers walking at the
cost of a packet of cigarettes and the cost of

(00:57):
a pouch of tobacco, and they're more than happy to
buy the illegal stuff. And I reckon. The time has
come to have a rethink about how we dealing with
cigarette smoking because the approach that's been taken so far,
aside from treatment programs and cessation programs and all of that.
So far, it's largely been about punishing people in the

(01:19):
pocket if they want to smoke. Hasn't it more and
more taxes to the point where people are paying a
small fortune And I'm not I'm not just saying that glibly.
They are paying a truckload of money for a packet
of cigarettes. And if we want to try and reduce
the amount of illegal tobacco trading going on, then I

(01:40):
think we need to think where the piling even more
taxes on tobacco is worth it, and I don't think
it is now. Look, I'm not I'm not saying that
we should make cigarettes cheaper. I'm not going to do
saying that cheapness. But I don't think we should make
them more expensive than what they are already because if
we do, what's that going to mean? Then the illegal

(02:03):
trade is going to grow even more, and that'll mean
less tax revenue for the government through the legitimate tobacco market,
and that's where we are all affected. The thing too
about not adding more taxes to siggi's and tobacco was
that it would still keep the price out of the
reach of people like teenagers, you know, people who could

(02:25):
become the next generation of smokers. So I'm not saying
make them cheaper, just don't make them more expensive. I
was talking to someone earlier who said that their partner
used to make a special trip into town that lived
out of the city, but they used to make a
special trip into town to buy tobacco from a dairien
christ Church that was selling pouches that were about twenty

(02:45):
dollars cheaper than what the legit stuff was going for.
And I'll be honest with you, if I was a smoker,
I reckon I would be very tempted to buy the
illegal stuff when you consider that the price of a
legit pack of twenty these are tailor maids. Of course,
a legit pack of twenty can cost you more than
fifty bucks, fifty to sixty bucks. And this person was

(03:08):
saying that their partner would go into the dairy. This
is first time, round asked them, saying, you know, if
you've got any of the cheap stuff, and sure enough,
person behind the counter would reach into the draw and
out it would come, and it was worth the drive
into the city to get it. Apparently the only qualm
I would have. And this probably sounds a bit weird,
given we're talking about cigarettes, which can kill you anyway.

(03:30):
But I think the only qualm I would have about
the illegal stuff is that you don't really know where
it's come from. But that isn't enough of a concern
for plenty of people who are more than happy to
use it and the organized criminals they know it. Customs
are saying today that these groups they're bringing in truckloads
of the stuff, container loads of the stuff into the country,

(03:51):
mainly by sea, using what Customs describes as sophisticated smuggling tactics,
similar to the tactics used by drug smugglers. I know
what you're thinking. You're thinking, well, of the know know this,
why aren't they catching more of them? Anyway? Customs says
they are serious criminals. The people involved in this, they're
not just opportunists having to go because they're worried about

(04:11):
the price of tobacco. They're not thinking, all jas, maybe
we can get some cheap stuff overseas and bring it
into the country. Chief Customs Officer Nigel Barnes, he's saying
today that it's on the increase, and he says the
trend is for larger and more organized smuggling methods. He said,
back in November, he sees back in November they sees
more than get this, more than two million cigarettes in

(04:34):
a shipping consignment from Cambodia. And so they're painting the
picture today that this is part of an international organized
crime system. He says. It requires supplies, financiers, distributors, and launderers. Yeah,
what else does it require? It also requires customers. And

(04:54):
unless we do something to try and reduce the demand,
then nothing's going to change. The expert Mike spoke to
this morning from Aukland University. He says, as far as
he's concerned, the solution is getting more people off smoking.
I agree, of course it is, But I also think
that's your ideal scenario kind of thing, which is why
I think the time has come to stop piling more

(05:16):
taxes on cigarettes and tobacco. It's done its job. That
making cigarettes more and more expensive is just going to
feed demand for the illegal stuff, which is ripping us off.
Because with every packet of illegal cigarettes and tobacco salt,
there's no tax revenue. Is there money lost money that
we could all benefit from. Here's a question, and why

(05:38):
would we continue to let that Happen.

Speaker 1 (05:41):
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