Illicit smokes stoke criminals’ profits

The high cost of cigarettes is proving a powerful lure for international crime syndicates keen to flog off cut-price smokes.

Increasing tax on tobacco products has been a key plank in the Government’s efforts to make the country smoke-free, resulting in New Zealanders paying some of the heftiest cigarette prices in the world. The inflated cost of smokes has not gone unnoticed by overseas crime groups, with Customs officers making record tobacco seizures at the border.

‘‘New Zealand pays a really high price for drugs [and] it pays a really high price for tobacco,’’ Customs investigations manager Bruce Berry said. ‘‘We have seen a dramatic move from organised crime . . . into moving of tobacco products. We predicted that this would be coming because of the prices that we are paying.’’

In July, Customs intercepted 2.2 million cigarettes hidden inside stacks of metal frames exported from Malaysia. At the time it was the largest tobacco seizure in a single shipment.

That amount was surpassed in early August when 2.39 million cigarettes were intercepted, hidden inside construction materials. A third shipment of 2.31 million cigarettes was intercepted by Customs officers in late August. This compares with 585,917 cigarettes and cigars being intercepted at the border in 2016.

Berry said the smuggled cigarettes came from countries such as the United Arab Emirates and Malaysia. In some Southeast Asian countries, a packet of cigarettes could be bought for less than a dollar and then illegally sold in New Zealand for about $20, giving last year’s seizures a street value of nearly $9 million.

‘‘There is a definite connection with organised crime . . . for them, it is all about the money. They don’t care what the commodity is,

they just want to push it through,’’ Berry said.

In July, new importation rules made tobacco products, leaf and refuse prohibited imports. A permit is now required to import these products. The new rules allow Customs to seize and destroy all illegally imported tobacco products.

A trend seen overseas, but not yet in New Zealand, is counterfeit cigarettes.

‘‘We get some reporting of it occasionally but we have not seen it of any note. That is where they take a lower-quality tobacco and then sell it as Marlboro or whatever, expecting a higher premium price,’’ Berry said.

Meanwhile, methamphetamine continues to be organised crime’s illicit drug of choice worldwide. Whereas previously a lot of meth originated from Southeast Asia, intelligence indicates that Colombian and Mexican cartels are now targeting New Zealand via North America.

How smuggled drugs were distributed in New Zealand had also changed, Berry said. ‘‘Traditionally, the gangs oversaw a lot of the process. We are [now] seeing what we call shore parties ... They arrive here, they set up to receive packages containing drugs ... distribute the drugs and then start washing the money and pushing money through.’’

While the street value of meth had declined since the 1990s, the quantities of the drug being smuggled around the world had increased, he said.

‘‘New Zealand pays a really high price for drugs [and] it pays a really high price for tobacco.’’ Bruce Berry Customs investigations manager