Customs seize largest haul of illicit tobacco to date

MEDIA RELEASE

28 November 2018

Customs seize largest haul of illicit tobacco to date

New Zealand Customs investigators have smashed the country’s largest-scale illicit tobacco operation with more than 1.8 million cigarettes and $2 million in cash seized last week.

Imperial Tobacco New Zealand’s General Manager Sam Abbott applauded the successful operation by Customs. “The seizure, estimated to be worth $1.8 million in lost excise, supported research released earlier this year from KPMG UK about the scale of illicit tobacco trade in the country.”

“The independent research found the total illegal tobacco consumption was around 9 per cent in 2017 in this country. If this illicit tobacco had been sold legally it would have generated about $182 million in tobacco excise for the Government. That lost revenue could have supported development of infrastructure, roads, hospitals and the general economy,” he said.

Mr Abbott said eight years of consecutive tobacco excise increases had contributed to the illicit trade.

“The illicit market will continue to grow as further 10% annual increases on tobacco excise drive the legitimate market retail prices higher,” Mr Abbott said.

The latest operation started six months ago when Customs officers suspected a company of smuggling cigarettes inside sea containers. An inspection found 340,000 cigarettes hidden inside 12 metal cabinets. Customs investigators then carried out search warrants at multiple Auckland addresses, locating around 1.5 million cigarettes and five garbage bags filled with cash.

An Auckland businessman was arrested by Customs investigators at Auckland Airport last Wednesday 21 November 2018, as he attempted to depart the country. The arrested man was charged with defrauding Customs revenue. Further charges and more arrests are likely.

Mr Abbott said the operation highlighted how much needed to be done to prevent the illicit trade growing.

“This problem can no longer be ignored. We congratulate Customs on their success and their inter-agency approach but this seizure is the tip of the iceberg and we encourage the government to continue tackling this issue.”

Link to KPMG UK Report: https://home.kpmg.com/uk/en/home/insights/2018/07/illicit-tobacco-in-new-zealand-2017.html

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