Data released under the Official Information Act shows the scale of New Zealand's cigarette smuggling problem, after Customs received a $10 million budget boost to fight it.
Cigarettes are being seized at the border in relentless quantities: more than quarter of a million a month, along with an average of 129 kilograms of loose tobacco.
Customs is bracing for the problem to increase as smoking laws get stricter - and promising to put the heat on the people responsible.
The first three months of this year saw more than 800,000 individual cigarettes confiscated by Customs officers, which was 60 percent more than the same three months in 2021.
They also seized a whopping 390 kilograms of loose tobacco.
Officers had observed increasingly bold smuggling techniques.
File photo: Cigarette cartons smuggled inside of boxes in a shipping container, found by Customs in 2019. Photo: NZ Customs / Supplied
Instead of small bundles turning up at the international mail centre, Chief Customs Officer for Fraud & Prohibition Nigel Barnes said larger quantities were being discovered in sea cargo, disguised inside door panels or parcels of food.
"It's definitely an escalation in numbers and in scale. And predominantly, now, we're seeing there's more organised crime involved in tobacco smuggling," he said.
Customs knows it isn't catching every illicit piece of tobacco, and many cigarettes are making it into the country undetected.
"Anecdotally we know that illicit tobacco is being sold in dairies and through other networks. Also online - we know people use social media and online sales forums," Barnes said.
But he described figuring out the full extent of New Zealand's tobacco black market as "notoriously difficult."
That's something University of Otago researchers have been trying to calculate by studying the labels of cigarette packets littered on the ground while the borders were closed.
They expect to publish the results soon.
File photo: A closeup of cigarettes revealed in an opened box disguised as foodstuffs. Photo: NZ Customs / Supplied
Anti-smoking group ASH said there were some estimates that illicit trade could make up about 10 percent of the total tobacco market.
"So you can imagine what that is in the loss of tax take. And it's probably increasing," director Deborah Hart said.
As the cost of legally purchased cigarettes creeps up - to a current average of $38 a packet - Hart said illicit trade was becoming more and more lucrative.
She felt current efforts to stop it were "clearly not enough".
"And you can tell from the government's Budget announcement that they don't think its enough either," she said.
Customs was awarded $10.4m across four years to help it fight "increasingly organised, sophisticated transnational tobacco smuggling operations."
Exactly how the money will be divvied up is yet to be decided.
Customs Minister Meka Whaitiri explained some would go towards new technology, including X-ray scanners at the ports.
"Smaller X-rays up to larger X-rays, because items come in various sizes. And [the cigarettes] are in shipping containers, and then you've got the packaging in the shipping containers," she explained.
Nigel Barnes said it would also be used to identify and prosecute those responsible.
"Merely seizing tobacco is a less effective strategy than focusing on enforcement and actually disrupting the groups that are organising this. That will involve a range of things, such as cooperation with offshore partners as well as looking to hit these guys in the pocket and look at seizing their assets."
In New Zealand, people caught importing tobacco can face up to five years in prison.
It's a far lighter sentence than importing illegal drugs, which can lead to life imprisonment.
However, Nigel Barnes said it was harsh enough - noting that tobacco smugglers often face a multiplicity of other charges like money laundering and drug smuggling.
Meka Whaitiri said the benefits of catching tobacco smugglers were two fold: helping even the playing field for companies operating legally, while helping inch the country closer to Smokefree 2025.
"So even though Customs aren't in a health space we are contributing to the overarching smokefree goal," she said.
ASH said the best way to counter the illicit trade would be to completely stub out the demand.
Deborah Hart applauded the government's continued efforts to encourage smokers to quit.
