Concerns over growth of illicit cigarette trade in New Zealand

SIMON DAY
Last updated 05:00 31/05/2015

Despite concerns in the tobacco industry, there has been a barely perceptible rise in the number of illicit cigarettes smuggled into New Zealand, according to Ash.

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A container containing close to 3 million counterfeit cigarettes has been seized by customs officials in Tonga.

The seizure, which happened on Tuesday, recovered 2.7 million Manchester cigarettes - a counterfeit brand distributed in Australia.

Before being seized in Tonga, the cigarettes were destined for Australia according to the Tonga Chamber of Commerce.

A black market of illicit cigarettes in Australia has increased from 13.5 per cent of the total market in 2013, to 14.5 per cent in 2014, according to a study by KPMG, commissioned by the tobacco industry. This amounts to $1.35 billion in lost taxes.

This a result of increased excise taxes according to the tobacco industry in Australia.

The cigarette industry in New Zealand says increased taxes here will have the same effect.

"In Australia, a recent KPMG report indicates consumption of illegal tobacco has reached record levels. It's a problem that will only get worse in New Zealand with rising tobacco taxes and extreme regulation," said Jason Erickson, General Manager, New Zealand and Pacific Islands, Philip Morris Limited.

However, according to customs and a recent study in cigarette smuggling in New Zealand continues to be very low, accounting for an estimated 1.8 to 3 per cent of the market.

"I can categorically state that it is not really a problem in New Zealand," said Ali Ajmal, Research and Policy Analyst at Action on Smoking and Health (ASH).

His report in the current Australia and New Zealand Journal of Public Health, says there has been a barely perceptible rise in illicit cigarettes.

And customs are not seeing smuggling on the scale like the confiscation in Fiji this week.

"We are not seeing large wholesale shipments trying to be smuggled through our borders. What we are seeing is high volume, low quantity coming through our mail and courier streams," said Shane Panettiere, Customs Manager Border Operations.

"We haven't noticed an increase," he said.

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