No surprises here, black market tobacco is growing

A few years back I attended a symposium in Singapore on Illicit Tobacco and how to combat it.

At the conference, we heard from law enforcement and customs people about the effect taxation had on illicit tobacco imports. Basically the more you tax the product the better the return for criminals to enter the illicit tobacco market.

So, it was no surprise to me to read this:

For smokers, the habit is getting increasingly expensive as the Government ups its tax to discourage smoking and recoup some of the health costs.

A pack of 20 cigarettes is expected to cost about $30 by 2020. A 50g packet of premium loose tobacco, used in roll-your-owns, currently costs about $78.

That is big money for hard-up smokers who are turning to the black market to buy stolen cigarettes and illicit loose tobacco.

Customs estimates the market for illegally manufactured or smuggled tobacco represents 2 to 4 per cent of consumption and is “not a significant problem”. Its figures are based on a 2013 report by Action Smoking and Health (Ash), which excludes stolen tobacco products.

Police believe the black market is fuelling armed robberies and burglaries, with criminals targeting dairies and stealing tobacco products for resale rather than for personal use.

King says: “There’s going to be people shot over it [tobacco]. Someone is going to get killed.”

Customs are dreaming and the Police are picking up the pieces. At the select committee a few years back I told them this would happen, I also told them how easy it was to get hold of illicit tobacco. In Auckland a phone call and a bag of cash can get you a 40 foot container full of illicit tobacco inside 24 hours. I offered to prove it to the MPs, but they turned me down.

A smoker looking for cheap fags can find a host of people in Christchurch selling cut-price tobacco online.

As an example, Stuff  visited an Aranui home and bought 80g of loose tobacco for $80 from 21-year-old Jasmine Lasseter, who was advertising on Facebook.

Lasseter claimed the tobacco was “factory seconds”, sourced from a local business owned by her friend’s father. She got a kilogram at a time so she never ran out.

Initially acknowledging she avoided paying tax on the tobacco, when confronted later she changed her story.

Lasseter’s Facebook page indicates her sales amount to at least 1kg of tobacco each week. She offers discounts for regulars.

Surprisingly sellers like Lasseter appear to be operating unhindered by Customs, which is responsible for collecting the duty on tobacco.

A Customs spokeswoman said the agency would look into reports or information “provided to us” and “enforce any offences discovered in relation to illegal tobacco”.

Customs did not ask for details of Stuff’s sting although those were supplied later.

While Customs appears unconcerned about the black market, BAT has hired a private detective to investigate the issue and is keen for the media to expose those involved.

BAT spokesman Saul Derber estimates the size of the black market has at least doubled since the 2013 Ash report.

“I would say 1 to 2 million 30g pouches (worth about $45 each) are being sold on the streets of New Zealand without any tax being paid, without any health warnings applied and no concerns about what age group they’re selling to. Sales are rife of chop chop (illicit tobacco).”

The tobacco giant acknowledges a vested interest — illegal sellers are eating into their profits.

Typical media, taking the side of a criminal illegally selling a controlled product. BAT is perfectly and legitimately entitled to stop people trading in illegally in a controlled substance.

The anti-tobacco campaigners always want higher and higher taxes. They ignore the evidence around the world and it is clear they care more about their crusade than the victims of their crusade. It is their irrational campaigning that has lead to this explosion in crime.


– Fairfax

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