In 2013, ASH analysed the size of the illicit tobacco market in New Zealand as part of its update on a previous ASH report (Illicit Tobacco Trade: Monitoring and Mitigating Risk in New Zealand). The findings show illicit tobacco continued to form a minor part of the total tobacco market in New Zealand. They were presented in an extensive report titled Update of Illicit Trade in Tobacco Products in New Zealand 2013.
In order to investigate claims by the tobacco industry that rising tobacco tax was encouraging the New Zealand illicit tobacco market, ASH’s Research and Policy Analyst conducted a follow on study to specifically look at the effect of tobacco tax on illicit tobacco trade in New Zealand. This original study, titled Tobacco Tax and the Illicit Trade in Tobacco Products in New Zealand, 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. These results have been published in the Australian and New Zealand Journal of Public Health.
This, alongside analysis of annual tobacco returns figures filed by tobacco companies with the New Zealand Ministry of Health, show that tax increases enacted by the NZ Government since 2010 have forced manufacturers to focus on the production of cheap legal tobacco products, directly competing with and undercutting the demand for illicit tobacco products. Furthermore, 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.