Half Of Kiwi Dairies Predicted To Close With Tobacco Licensing.

Despite a 33% collapse in daily smoking in just two years putting us on track for Smokefree Aotearoa 2025, the Ministry of Health has started implementing Labour’s plan to slash cigarette outlets by 90%. This means just 595 outlets from Northland to Southland.

“Dairies will not just close, but those selling cigarettes will become targets for criminals and worst of all, it puts the gangs in charge of New Zealand smoking policy,” says Sunny Kaushal, chair of the Dairy and Business Owners’ Group Inc.

“The frustrating thing is that this law change wasn’t even needed.

“In the past two years and this is Ministry data, daily smoking has gone from just under 12% to 8% at the end of last year. Daily smoking is down a full third with 154,000 fewer Kiwis lighting up daily and record falls in Maori smoking too.

“This is all down to vaping with 90% of vapers over the age of 25 being ex-smokers.

‘Yet the Ministry of Health is now on regulatory autopilot. It has kicked off applications and they’re going to make millions because each application costs $1,475, not forgetting GST. For the unsuccessful they will have around three months to adapt their business.

“That’s why we fear this could put half of all dairies out of business. Some 2,000 businesses. Yes, we knew of Smokefree Aotearoa but until 2021 that was a goal like ‘Road to Zero.’ It is only since 2021 that we knew it was going to become regulated.

“Labour is deliberately taking highly compliant small businesses off the chessboard. The application pack is dense and the opposite of plain-English. It’s designed so that dairies cannot quality meaning no outlets in places like Reefton or Patea.

“Do the mandarins running health, or Dr Verrall, seriously think the gangs care about youth access or controlled purchase operations? Dairies have been 94% compliant after thousands of inspections since 2019. Incidentally, it’s 97% compliance for selling vapes since 2022.

“We fear for the next few months. Our guys will be turned into an all you can rob buffet for criminals when there’s been an explosion in serious crime directed at us. People will be injured and we fear another murder may well result.

“And when these licenses start next July, each will turn over about $3m a year with a lot of that being cash. As there are fewer banks these days and even less in rural areas, they will provide tempting targets for the armed hold up to make an unwelcome comeback,” Mr Kaushal said.

Notes

In 2021 Z Energy in an NZX presentation confirmed cigarettes made up 47% of its non-fuel store sales and contributed 21% towards non-fuel store gross margin ($189m and $20m respectively). This is similar to dairies.

In New Zealand anyone aged over 18 (including the Smokefree Generation) may manufacture 5 k.g. of tobacco for personal consumption; equivalent to 300+ packs or over $10,000 worth on retail current prices.

Retail has seen record increases in crime including Crimes Act offences in 2022 with 2023 continuing this trend.

Dairies have been 94% compliant with cigarette sales since January 2019 and 97% compliant with the sale of vaping and smokeless tobacco products in the three regulated flavours since January 2022.

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