Beating back the illicit tobacco trade
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What is the main issue with the illicit tobacco trade?
I'm Alexia Russell and today on The Detail.
Tobacco wars out of control.
A multi-million dollar illegal tobacco syndicate has been smashed in south-east Queensland.
Generating billions in black market money.
Close to 100 officers raiding 16 Queensland homes, businesses and warehouses in a two-day sting across the Moreton Bay region.
How have recent police actions impacted the illicit tobacco market?
There's been a fresh escalation in Melbourne's tobacco wars. A ram raid smash has ignited a fiery inferno across multiple businesses in the city's east.
For the second time in a week we've had a tobacco shop firebombing and this time in Richmond it has caused significant damage to not just the tobacco store but a number of other businesses. Police have stretched to their absolute limit and we just actually can't arrest our way out of this.
The latest incident in Australia, the firebombing of an illicit tobacco shop in Melbourne on Monday.
Australia is the ghost of Christmas future for us. What happens there will happen here. So we need to be ready for that.
That prediction came from the head of the Ministerial Advisory Group on Organised Crime, Steve Simon, in a detailed podcast from September last year. He had black market tobacco on his radar because of what was happening in Australia. And now the future is here.
A government task force set up to target black market cigarettes says it shut down a network and raided eight stores that were selling products. The Joint Customs Police and Health Bust has seen five people arrested and more than 1.3 million cigarettes seized in raids across Auckland, the Waikato and Rotorua. During a search of 21 properties, the task force identified seven locations where with stockpiles of illegal smokes and evidence of the network's plans to recruit new retailers.
It is clear that organised crime is increasingly involved in the illicit tobacco trade as an additional revenue stream to fund other transitional, serious and organised crime activities. Like those other criminal activities, illicit tobacco can also involve intimidation, extortion and violence. So it's anything but a harmless, victimless crime.
But a lot of us are taking part in this illicit behaviour. Retail NZ estimates upwards of 30% of cigarettes smoked here are illegal, though that's disputed by smoke-free advocacy groups as being too high, and officials say many of those studies have suspect methods. In Australia, that figure is estimated by government sources to be at at least 80%. It also has the worst tobacco-related violence and the highest excise tax in the world. Later, I'm speaking to a former top cop turned consultant in Australia who created and led the Australian Border Force's tobacco strike team. His unpalatable solution to stomping out this issue? Making legal cigarettes cheaper.
It's strange to say, but a decrease in the excise rate will actually increase the take because more people, hopefully people will go back to a legal regulated market as opposed to what the current situation is where people are selling it, selling any product. They don't care what the product is or what's in it, and they don't care who they sell it to.
But first, Finn Blackwell, the RNZ reporter who's been following the development of illicit tobacco here and investigating what's actually in those under-the-counter products. I asked him if we've got to the stage yet that Australia's at.
No, we're not. And we heard from the police side of the government's action group for illicit tobacco that spoke in Auckland last week. They said that we're not at that level yet, but they are concerned about us reaching that level. They also added that bad actors from Australia, they believe that they are eyeing up New Zealand as a potential next step.
Extension of their activities, I think. I mean, obviously the government is taking this seriously if there is an illicit tobacco group.
What are the consequences of high excise taxes on tobacco?
Can you tell me a little bit about that organisation, what it does?
Sure. So they were formed in May and that's made up of customs who police it at the border, obviously, the police who look at it in the community and broadly share intelligence around that.
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Chapters
6 chapters
1
What is the main issue with the illicit tobacco trade?
0:00–0:21
2
How have recent police actions impacted the illicit tobacco market?
0:21–4:06
3
What are the consequences of high excise taxes on tobacco?
4:06–8:59
4
How is organized crime involved in the illicit tobacco trade?
8:59–15:16
5
What solutions have been proposed to combat illicit tobacco sales?
15:16–22:18
6
How does the situation in New Zealand compare to Australia?
22:18–23:59