Tobacco sales dip 23% over four years: Ash

The average price of a packet of 20 cigarettes is expected to exceed $20 next year. Photo / Thinkstock

Supplies of black market tobacco in New Zealand have increased slightly but are still at low levels.

And sales of legal tobacco shrank by 23 per cent from 2009 to 2013, say researchers from Action on Smoking and Health.

They estimate, based on customs contraband data and calculations on the proportion of smuggling that goes undetected, that illicit tobacco comprised 1.8 to 3.9 per cent of the total tobacco market in 2013.

That is up from the Ash estimate of 0.7 to 2 per cent in 2010. That was the year when the Government boosted the excise tax on cigarettes by 10 per cent and on loose tobacco by 24 per cent and embarked on annual increases of 10 per cent on both until next year.

The average price of a packet of 20 cigarettes is expected to exceed $20 next year. Price rises are the Government's key method of reaching its 2025 "smokefree" goal.

But a Christchurch researcher, Dr Murray Laugesen, said: "The annual rise in excise of 10 per cent is not sufficient and Government needs to raise it further to reach that goal. The rate of fall [in legal sales] is insufficient to reach the national goal of less than 5 per cent of adults smoking by 2025."

Tobacco companies say the tax increases will fuel the black market, depriving the Government of tax revenue, as smokers seek cheaper options.

The Ash research, published today in the Australian and New Zealand Journal of Public Health, estimates that of the up to 3479 million cigarettes and loose leaf cigarette-equivalents consumed in New Zealand in 2013, 134.7 million were illegal. This includes about 26 million cigarettes and four tonnes of loose tobacco imported duty free and traded illegally.

"We are not seeing anything that alerts us to a particular problem," a customs spokeswoman said. She said tobacco "detentions" had been rising, but most were not illicit tobacco.

In some cases the importer chose to dispose of the product rather than pay the duty and GST and in others the sums were paid and the tobacco was released.

Contraband tobacco
• 800,000 cigarettes and 221kg of loose tobacco - voluntarily surrendered, plus detected and confiscated by Customs, annual average, 2007-2009.

• 962,000 cigarettes and 2319kg of loose tobacco - annual average, 2010-2013.
Note: Detained tobacco is released if the importer pays all taxes

Source: Action on Smoking and Health