Public tips regarding the black market tobacco trade in New Zealand have reached 250 since May, though experts warn the illicit supply chain is becoming increasingly sophisticated and organized.
Data released to RNZ under the Official Information Act confirms that the Illicit Tobacco Action Group—a cross-agency body formed in May comprising Customs, Police, and health officials—received these tips between May and September. The majority of reports originated from Health NZ referrals, followed by the Crimestoppers tipline.
While authorities work to address the trade, the issue is large. A Retail New Zealand report published in April said that 27% of tobacco smoked in 2024 was illicit. Investigations have revealed that black market cigarettes are frequently sold over the counter without mandated health warnings, sometimes for as little as $13, by bypassing excise taxes.
Ben Youdan, director of Action for Smokefree Aotearoa, noted, "At the front line, it’s very easy to go into a lot of places in New Zealand and buy cheap, illicit tobacco." He added, "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."
Illicit Tobacco Action Group Conducts First Joint Operation
The Illicit Tobacco Action Group conducted its first joint operation, resulting in five arrests and the seizure of more than a million cigarettes. Customs Assistant Comptroller Terry Brown said that the agency assesses all referrals to determine how they can best support broader investigations into organized criminal activity.
"A single referral may contribute in more ways than one over the course of an operation," Brown said. "Rather than responding to every tip with a direct, visible intervention, we use that data to support other strategies aimed at dismantling organized criminal networks," he explained.
Customs officials withheld specific information regarding the outcomes of individual tips, citing the potential to prejudice ongoing judicial and investigative processes. Meanwhile, border data shows that almost 12 million cigarettes and cigars were intercepted at the border in 2026.
Falling Cigarette Imports Suggest Growing Reliance on Illicit Sources
Industry data indicates a steady decline in the number of cigarettes imported and released to the market. However, Youdan said that this reduction does not align with the number of adults who continue to smoke, suggesting a growing reliance on illicit sources.
"We are seeing a potential disconnect where cigarette sales are dropping, but the number of smokers isn’t falling at the same rate," Youdan remarked. "This often indicates that people are finding alternative ways to obtain cigarettes, such as through illegal channels, which suggests the problem is worsening despite potentially more robust enforcement efforts," he added.
Carolyn Young of Retail NZ reported that illicit stores are expanding, with a growing presence noted in the South Island. Young said that the current legislative framework limits the ability of enforcement agencies to effectively close stores and seize illicit stock.
"This highlights the difficulty retailers and the public face in understanding the proper channels for seeking change," Young observed. "We want to see more, but there is an urgent need for new legislation that provides authorities with the necessary power to shut down these shops and confiscate their inventory."
Questions Regarding Illicit Tobacco
How does the illicit tobacco market impact tax revenue?
Importing and selling tobacco without paying the required excise duty is illegal, and offenders face potential fines or prison time. Retail NZ reported that 27% of tobacco smoked in 2024 was illicit.
What is the current focus of the Illicit Tobacco Action Group?
The group is currently prioritizing the disruption of large-scale, organized distribution networks rather than focusing solely on front-line retail enforcement. Ben Youdan said that addressing the higher-level supply chain is the primary challenge for enforcement agencies.
Related reading