Illegal cigarettes are getting easier to find - and harder to stop

Hundreds of tips are informing the government's anti-black market tobacco group, but experts say the illicit supply chain is growing and evolving.

Data released to RNZ through an OIA shows the group has had 250 tips from the public since they were formed in May through till September this year.

The majority came from Health NZ referrals, followed by the Crimestoppers tipline.

A months-long RNZ investigation has found illicit tobacco is being sold over the counter without mandated health warnings and for a fraction of the cost of retail brands.

They were typically sold without the hefty excise tax, with one East Auckland store selling black market cigarettes for as low as $13.

In April Retail New Zealand released a report saying 27 percent of tobacco smoked in 2024 was illicit tobacco.

Importing cigarettes without paying the excise duty is illegal, as is selling illicit smokes, and offenders can face a fine or prison time.

To tackle the issue, the government formed the Illict Tobacco Action Group in May, made up of Customs, Police and Health officials.

It's first joint operation saw five people arrested and more than a million cigarettes seized.

Assistant Comptroller Terry Brown said all referrals received by Customs were assessed and acted on appropriately.

"A single referral may contribute in more ways than one over the course of an operation," he said.

"As such, it is not a case of acting in an overt operational manner in response to each referral received, rather referral information can inform other operational aspects that contribute to the disruption of organised criminal activity."

Brown said referrals informed operational activity, corroborated other intelligence they received, and provided situational awareness.

Customs withheld information in the OIA about the result of tips they'd had and acted on, saying it would be likely to prejudice the judicial and investigative process.

Action for Smokefree Aotearoa director Ben Youdan said it was especially difficult to keep track of the back market as the illicit supply chain grew more organised.

"At the front line, it's very easy to go into a lot of places in New Zealand and buy cheap, illicit tobacco," he said.

"Yes, it's great that we're getting complaints about places selling illicit tobacco and something's being done there, but actually I think we've really shifted in recent years to a much more organised illicit market."

Youdan said recent data from the tobacco industry showed the number of cigarettes they were importing and releasing to market had been steadily declining.

That did not match data from adults who still smoked, he said.

"We're potentially seeing a kind of gap between falling cigarette sales, but not corresponding decline in people who are smoking," Youdan said.

"Often that can be a sign that people are accessing their cigarettes in other ways, including through illicit sources, which can be a worrying sign that the problem is continuing to grow despite potentially increased enforcement."

The challenge was addressing the higher level supply chain, with large scale importation and organised distribution networks, he said.

"That's where the real big challenge is at the moment, which is where we need these organised collaboration between the enforcement agencies, rather than just punishing at the front line."

Retail NZ's Carolyn Young said they had seen new illicit stores open recently, as well as a growing presence in the South Island.

Young said they had members of Parliament coming to them for help in their constituencies.

"It does demonstrate that it is quite hard for retailers and members of the public to really understand where to go and how to go about doing things to get change," she said.

Young said legislative changes were needed.

"[Customs, Health, and police] have got limited resources and limited tools in which they can make a difference," Young said.

"We want to see more but we need to see some urgency into putting in place some new legislation that will give them the powers they need to close stores and take stock."