Organised crime groups are flooding New Zealand with illegal tobacco, using smuggling tactics similar to drug trafficking and costing the country hundreds of millions in lost tax revenue.
Customs says nearly one in four cigarettes sold in New Zealand may be illicit, with smugglers exploiting sea cargo, international travellers, and online platforms like Facebook Marketplace—where product names are disguised in foreign languages.
A recent bust at Wellington Airport intercepted a 35-year-old Indonesian man with five cartons strapped to his body, worth $2,447 in unpaid tax. In Christchurch, 740kg of tobacco and cigarette manufacturing machinery were seized, with one man jailed for over three years.
Last month, four people were sentenced over a smuggling ring that shipped 132 packages of tobacco to Napier and Gisborne, defrauding the country of more than $540,000.
Chief Customs Officer Neil Barnes said many cases link to wider criminal networks. “We often uncover drugs, firearms, and money laundering during tobacco investigations,” he said.
A 2023 report estimates illegal tobacco use rose 37% last year, with 332 tonnes consumed and up to $330 million lost in excise tax. Customs is targeting the trade with a $10.3 million government boost and a dedicated enforcement team.
China remains the main source, but the Middle East is emerging as a growing supplier.