The end of the corner dairy?

Following on from my article on this subject yesterday, the media is now talking as if time is up for the grand old institution of the corner dairy.

The future of dairies is unclear as tobacco-driven crime skyrockets, the convenience stores association boss says.

Aggravated robberies jumped 87 per cent in the year to May 2017, with more than 1200 nationwide. Cigarettes were among the main targets.

Some dairy owners have stopped selling cigarettes to try to deter robbers, but are now paying the price.

Dave Hooker, the executive director of New Zealand Association of Convenience Stores which mainly represents service stations, said the future of dairies and convenience stores were “at best uncertain and in many cases frightening”.

I heard HDPA on the radio this morning, saying that she thinks that dairy owners need to be responsible for their own security, and should not be petitioning the government to help them out with subsidised fog cannons.

That is all very well, but if it wasn’t for badly thought out government policy, dairy owners would not be in this situation in the first place. And I think it is likely that she has no idea that dairy owners work very long hours, do not make a huge amount of money and probably cannot afford to install the type of security they need.

On Saturday, three teenagers robbed a dairy in Hamilton armed with hammers. One member of the hoodie-wearing trio held the lone shopkeeper down while the others stole cash and tobacco.

Nice.

And last Tuesday, a Hamilton East dairy owner was severely injured by a machete-wielding robber.

The Te Kowhai Food Centre, subject to at least 10 robberies, has since stopped selling tobacco, costing its owner $700 in sales a week.

Hooker said tobacco accounted for up to 40 per cent of business.

“The value of their business is being eroded through risk of violence. Even at the current low gross profit margin, this turnover and income is almost impossible to replace quickly.”

Here is the thing. I know a lot of people are anti-smoking and think this is all a good thing. They think that it will reduce smoking overall, and lead to people leading healthier lives.

But it won’t.

All that will happen is that corner dairies will disappear. Not only do they make a significant portion of their revenue from tobacco sales, but they also rely on smokers who come into the shop and pick up other items while they are there. If the smokers stop coming, not only do they lose the revenue from tobacco sales, but they lose the revenue from all the incidental sales as well.

In the meantime, because cigarettes are a fixed price item, mainly because of the enormous portion of tax on the product, smokers will just switch to buying their cigarettes from a supermarket, or a service station or bottle store. These are places that can manage the security needed for high-risk items, so no one actually needs to smoke less. They will just get their fix from a different place.

Robberies were an “unintended consequence” of the year-on-year excise tax that has been put on tobacco since 2010, he said.

The average price of a 20-pack of cigarettes was about $11 in 2010, and was now about $25.50.

Tobacco taxes were a “real-world example of how the best policy intentions can go wrong”, he said.

“Tobacco has become a high value commodity that can quickly and easily be on sold for cash. It’s all about cash.

“With the odds of being captured and prosecution being low, this sort of thieving could be a means to an end at the expense of small business owners.”

So here we have an admission from a government minister that it is bad policy, with unanticipated consequences. So what are they going to do about it? Absolutely nothing, by the look of it.

So cherish your local dairy, if you have one. A long-standing Kiwi institution is well and truly on its way out. And this isn’t necessarily because of changing times. It is because no one can be bothered dealing with the criminals that are causing their demise.

-Stuff


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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