Tobacco Excise Increase To Drive Illegal Market

Imperial Tobacco New Zealand Limited says that the excise increases announced in today’s Budget ignore the reality of tobacco consumption in New Zealand.

Corporate Affairs Manager for ITNZ, Louse Evans McDonald, says that the move to increase prices will simply see smokers shift to alternative supplies.

“Today’s announcement fails to address the fact that New Zealand has some of the most lax laws on home grown tobacco anywhere in the world. Increasing the price of commercially manufactured tobacco will serve only to shift smokers into considering growing their own.

“The result of that shift in supply is for the Government to collect less in excise.

Ms Evans McDonald says that the development of a significant market in illicit tobacco will become a serious threat subsequent to these major price increases.

“We’ve seen in other countries with high tobacco excise levels the attraction to criminal gangs of trading in illegally imported tobacco. Australia now sees about one in every seven cigarettes smoked being illegal.

“International criminal gangs take advantage of excise differentials. We are seriously concerned that the excise increase in New Zealand will see our country become a target for those gangs.

“We call on the Government to take heed of our warning. They must now act to ensure that the illicit market – both traded home grown tobacco and illegally imported cigarettes – does not become entrenched in New Zealand.”

ENDS

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