Black market soaring

Radio NZ reports:

Cigarettes are being seized at the border in relentless quantities: more than quarter of a million a month, along with an average of 129 kilograms of loose tobacco. 

Customs is bracing for the problem to increase as smoking laws get stricter – and promising to put the heat on the people responsible.

Government policies have led to a huge increase in the black market. This means that instead of smokers buying a regulated taxed product, they are buying an unregulated untaxed product.

Anti-smoking group ASH said there were some estimates that illicit trade could make up about 10 percent of the total tobacco market.

“So you can imagine what that is in the loss of tax take. And it’s probably increasing,” director Deborah Hart said.

As the cost of legally purchased cigarettes creeps up – to a current average of $38 a packet – Hart said illicit trade was becoming more and more lucrative. 

The tax increases worked well for many years as a tool to discourage smoking. But they reached a point where they no longer discourage the remaining hard core smokers – they just fuel the black market.