Summary
Recent media reports suggest illicit tobacco supply is on the rise in Aotearoa New Zealand. This requires urgent and co-ordinated government action to avoid the same issues currently facing Australia, where an estimated 55% of the total tobacco market may be illicit sources. We also have the opportunity to learn from the new measures being rolled out in Australia to control this issue.
However, the Government of Aotearoa must not respond to illicit tobacco trade at the expense of sound tobacco control policy, given the tobacco industry’s common use of the threat of an illicit market as a tactic to weaken restrictions and to lobby for lowering tobacco taxation.
Although the current Government has a poor track record of supporting robust and effective tobacco control policy, learning from Australia and adopting the measures outlined in this article would represent a much-needed positive step.
Recent media reports have raised concerns about an apparent increase in the illicit tobacco market.1 Illicit tobacco products are typically smuggled into Aotearoa, rather than grown locally, and sold relatively cheaply (eg, at a third or a quarter of regular retail prices) because sellers collect neither GST nor pay customs duty on the tobacco.2 Apart from the discounted price, illicit tobacco can be recognised by non-compliance with plain packaging or health warning regulations.
Previous Briefings (see here and here) have noted the difficulty of estimating illicit trade volumes.3 Our most recent research from 2024 found that, despite the relatively high cost of tobacco in Aotearoa, the illicit market had remained small and relatively stable.4 Furthermore, interest in using illicit tobacco by people who smoke seemed low.5 However, recent media coverage, together with work currently in progress, suggest illicit tobacco has become more widely available since 2024.
Reports suggest illicit tobacco products originate from the Middle East, China and Korea,1,2 and include counterfeit products copying popular brands and contraband products.6 In addition to branded products, loose tobacco (in resealable plastic bags) has also been seized, including Tongan tapaka. Importation of this loose tobacco poses a significant biosecurity risk to Aotearoa.7
Aotearoa’s experience parallels how the illicit market evolved in Australia. We have an opportunity to learn from Australia’s experiences and avoid the outcomes they now face.
What can we learn from the Australian response?
Australia has had a world leading tobacco control programme spanning decades. Illicit tobacco was not a major concern until recently. Survey data from 2016 to 2019 suggest illicit tobacco accounted for around 4% and 6% of the market, respectively. This figure increased to 10% in 2022/23,8 but recently the Illicit Tobacco and E-cigarette Commissioner estimated around 55% of the Australian market was illicit in 2024/25.9
The high cost of legal tobacco and increases in the cost of living may have fostered illicit tobacco’s appeal to people who have difficulty stopping smoking.8 However, this does not fully explain the recent proliferation of illicit tobacco as legal tobacco has been expensive since the Government implemented a progressive tobacco excise tax regime in 2010.
Australia’s initial response to concerns about increasing illicit tobacco trade was slow, which allowed the market to become established within retail outlets. However, this is now changing as federal and state governments have put several measures in place, including: establishing a cross-sector taskforce to address the illicit market; increasing powers for tobacco control enforcement officers to investigate and seize illicit products; focussing on rapid enforcement as a deterrent (eg, on-the-spot fines as opposed to prolonged prosecutions); and allowing landlords to terminate leases where people are suspected of selling illicit tobacco on their property.8 Australian tobacco control experts have proposed additional measures to simplify public reporting of potential illicit tobacco suppliers, help to trace the origin of tobacco products, improve detection and seizure of tobacco at the Australian border, and streamline prosecution mechanisms for those importing, distributing or selling illicit tobacco.8 These examples from Australia and additional suggestions should guide Aotearoa’s response.
Threat of illicit tobacco: A common tactic used by tobacco industry to weaken tobacco control
Raising concerns about illicit tobacco is a common scare mongering tactic used by the tobacco industry to further their interests by obstructing or even reversing tobacco control policies.10 This argument was one of those used by the current Government to justify its repeal of world leading ‘tobacco endgame’ legislation, likely influenced by industry.11 Most recently the industry blamed tobacco control policies for the apparent rise of the illicit tobacco market.12 Others have argued these arguments are flawed as they would erode gains in reducing smoking while serving the interests of the industry.8
What should the Government be doing?
Reports that illicit tobacco supply has increased need immediate action to prevent it from becoming entrenched. At present, we lack a clear understanding of the illicit tobacco available, its distribution channels and prevalence of use. Addressing these gaps will require better monitoring and surveillance systems so we can detect illicit tobacco at our borders, identify where it is sold, and understand who is using it. Greater resourcing for Customs, Police and Smokefree Enforcement Officers will be critical, as will ongoing monitoring of supply chains and use.
Upholding our commitment as a Party to the WHO Framework Convention on Tobacco Control (FCTC), including eliminating illicit trade under Article 15, is pivotal. Parties to the FCTC who produce tobacco are required to mark their products to allow their origin and intended destination to be traced. The supplementary Protocol to Eliminate Illicit Trade in Tobacco Products was also finalised in 2012, however Aotearoa is yet to become a party to this protocol. Under Article 5.3 parties are required to protect their tobacco control policies from the vested interests of the tobacco industry, including understanding and formulating responses to illicit tobacco.13
Ensuring illicit tobacco supply does not become established in Aotearoa requires comprehensive cross-government coordination involving Customs, Police, Te Whatu Ora/Health NZ Smokefree Enforcement Officers and local councils. We need enhanced border security to detect and seize illicit tobacco products and expanded Police powers to allow searches of sites suspected of storing or distributing illicit tobacco. Increasing Smokefree Enforcement Officers’ search and seize powers would enhance rapid closure of supply routes, including premises selling illicit tobacco, as would enhanced powers to fine sellers (and larger fines) and allow immediate store closure orders. Ensuring landlords who knowingly allow illicit tobacco sales on their properties are also held culpable would further close the net. Appropriately resourcing and streamlining retailer prosecutions would establish clear precedents and deterrents. Finally, creating a licensing scheme for those selling nicotine products would help monitor and enforce poor compliance to legislation.
What this Briefing adds
- The availability of illicit tobacco may be increasing and following a similar pattern to Australia. Aotearoa can learn from Australia’s experiences.
- Quick responses are needed but not at the expense of good tobacco control policy.
- The tobacco industry has a history of using concerns around illicit tobacco as a strategy to undermine tobacco control.
Implications for policy and practice
- The Government and researchers need to learn from the Australian experience with the illicit tobacco market and the impact of control measures.
- The Government should subscribe to international agreements to eliminate illicit trade and limit industry influence over tobacco control policy.
- Customs, Police and Smokefree Enforcement Officers should be provided with additional resources to address illicit tobacco, with more personnel and equipment needed to better detect illicit tobacco at our borders and within the country.
- The Government should provide Police and Smokefree Enforcement Officers with upgraded legal powers be able to search for and seize illicit tobacco, and to fine or prosecute vendors of illicit tobacco.
Authors
Associate Professor Andrew Waa, ASPIRE Aotearoa and the Department of Public Health, Ōtākou Whakaihu Waka Pōneke | University of Otago, Wellington
Professor Janet Hoek, ASPIRE Aotearoa and the Department of Public Health, Ōtākou Whakaihu Waka Pōneke | University of Otago, Wellington
Professor Coral Gartner, NHMRC Centre of Research Excellence on Achieving the Tobacco Endgame, School of Public Health, The University of Queensland
Professor Richard Edwards, Flinders Nicotine and Tobacco Research Group, Flinders Health and Medical Research Institute, Flinders University, Adelaide, South Australia.
Dr Lori Leigh, ASPIRE Aotearoa and the Department of Public Health, Ōtākou Whakaihu Waka Pōneke | University of Otago, Wellington
Janine Nip, ASPIRE Aotearoa and the Department of Public Health, Ōtākou Whakaihu Waka Pōneke | University of Otago, Wellington
Lani Teddy, ASPIRE Aotearoa and the Department of Public Health, Ōtākou Whakaihu Waka Pōneke | University of Otago, Wellington
