For the study, we collected littered tobacco packaging around New Zealand between May 2021 and April 2022. Usually, these studies risk over-estimating tobacco smuggling as it is difficult to distinguish whether foreign packs are illicit or brought in legally by visitors.
But we were able to conduct a ‘natural experiment’ during a period when littered foreign packs were very likely to be smuggled because no international tourists and relatively few New Zealand travellers arrived while Covid border restrictions were in place.
Of 1,590 littered packs and pouches, 36 were foreign (2.3 per cent). Most foreign packs were from China (1.6 per cent of all packs) and South Korea (0.6 per cent), and were found mainly in Auckland and Wellington. When adjusted by population distribution, the estimated national prevalence of foreign packs was 5.4 per cent.
There may also be some use and trade in homegrown tobacco, but we suspect this is likely to be modest given its typically rough and unpalatable nature (due to the lack of processing and lack of additives).
Little change over time
The observed level of foreign packs was similar to earlier pack collection studies in New Zealand: 3.2 per cent in 2008/2009 and 5.8 per cent in 2012/2013.
This suggests the size of the illicit market in Aotearoa changed little over a period when tobacco excise tax increased very substantially and plain packaging was introduced.
The New Zealand findings also contrast with a 2010 global estimate for illicit trade in high-income countries of 9.8 per cent. They are also much lower than claims by the tobacco industry.
Will de-nicotinisation make a difference?
Greatly reduced nicotine levels are a key measure in the proposed smokefree legislation to make cigarettes and other tobacco products non-addictive. This should markedly reduce smoking uptake and encourage quitting or reduced consumption, as people who smoke find these cigarettes and tobaccos to be less satisfying.
The law could temporarily increase illicit tobacco use among some people who don’t quit smoking. However, people who smoke are more likely to switch to vaping (widely and legally available in New Zealand) than turn to the illicit market.
Even if the price of illicit tobacco is only half the current legal price, vaping would still typically be a much cheaper way to obtain daily nicotine.
The evidence from randomised trials and modelling studies for New Zealand suggests de-nicotinisation will substantially and equitably reduce smoking prevalence.
Combined with other measures in the Smokefree Action Plan, it should result in a greatly reduced demand for tobacco products, shrinking both the legal and illicit markets.
Tobacco smuggling in context
It is worth considering how society and governments respond to other illicit markets such as the sale of stolen goods, illegal firearms and illicit drugs.
Governments generally don’t abandon control measures like gun registers and sales restrictions or laws that make dealing in stolen goods or hard drugs illegal. Rather, they typically implement measures such as border controls and enforcement directed at dealers to minimise these illicit markets.
Given the potentially dramatic health benefits of smokefree measures such as de-nicotinisation, opposition on the grounds of illicit trade from the highly-conflicted tobacco industry makes a very weak case for abandoning smokefree policies.
A much more logical approach is to strengthen efforts to prevent illicit trade and implement robust monitoring and evaluation of intended (reduced smoking uptake, increased quitting) and possible unintended (increase in illicit tobacco market) outcomes of smokefree policies. That way, we can refine policies as necessary.
New Zealand is well-placed to control smuggling
Due to its relative geographical isolation and strong border controls, New Zealand is particularly well-placed to minimise illicit markets.
A recent international study of 160 countries ranked New Zealand first in the world - equal with Sweden - for controlling tobacco smuggling.
To prevent any potential increase in illicit trade, shipping containers from China and South Korea could be screened at higher levels, with ‘drug dogs’ trained to detect tobacco.
Exaggerated and discredited tobacco industry concerns about illicit trade should not mean key public health measures are abandoned. The appropriate response is to introduce additional enforcement efforts and enhanced monitoring with the full implementation of the Smokefree Aotearoa Action Plan.
Footnote: Imperial Brands refutes the opinion that the KPMG studies are exaggerated and discredited.
The authors’ estimates of illegal, imported cigarettes are not too far away from the same survey in the KPMG reports (5.4 per cent v 6.3 per cent). What the authors have excluded is illegal sales of home-grown and imported roll-your-own tobacco. This is a significant omission in estimating the size of the problem in New Zealand. The most recent KPMG report finds that 5.6 per cent of smokers report using both types of roll-your-owns. This is the highest level we have measured since we started these surveys.
Successive KPMG reports since 2016 have shown year-on-year growth in the size and sophistication of the black market. This trend should give cause for concern. Combatting it requires serious actions to increase sentences and greater resources for surveillance and enforcement.
John Mitchell, Communications and Legal Affairs, Imperial Brands NZ.
