Open AccessTobacco tax and the illicit trade in tobacco products in New Zealand
Author(s) -
Ajmal Ali,
U Veng Ian
Publication year - 2015
Publication title -
australian and new zealand journal of public health
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.946
H-Index - 76
eISSN - 1753-6405
pISSN - 1326-0200
DOI - 10.1111/1753-6405.12389
Subject(s) - consumption (sociology) , allowance (engineering) , tobacco industry , business , tax policy , tobacco use , tobacco in alabama , tobacco control , christian ministry , environmental health , medicine , tobacco harm reduction , public health , economics , public economics , political science , population , operations management , nursing , pathology , sociology , tax reform , law , social science
Objectives: To estimate the size of illegal tobacco trade and consumption and assess the impact of tobacco tax on the illicit tobacco market in New Zealand (NZ). Methods: Data on the import and seizure of legal and illegal tobacco in NZ was obtained from NZ Customs. Previous literature was used to calculate interception rates of illegal tobacco being smuggled and grown in NZ. Annual tobacco returns figures, obtained via the NZ Ministry of Health, were analysed to assess the market dynamics of legal tobacco products. Results: This study found that illicit tobacco constituted 1.8–3.9% of total national tobacco consumption in NZ in 2013. This represents a minor increase compared to previous estimates from 2007–09, suggesting that tax increases enacted by the NZ Government since 2010 have had a minimal impact on encouraging the use and procurement of illicit tobacco. Conclusions: The results highlight a slight rise in small‐scale tobacco smuggling through ports and mail centres. However, tobacco returns figures show that current tobacco tax policy has forced manufacturers to focus on the production of cheap legal tobacco products, directly competing with and undercutting the demand for illicit tobacco products. At the same time, locally grown illicit tobacco continues to remain a small, isolated problem and, with recent cuts in duty free tobacco allowance, it is expected that overall illicit tobacco will remain a very small proportion of total tobacco consumption in NZ.