Violence cost of ciggie tax
Stopping the sale of tobacco to deter robbers has cost a Waikato dairy almost $1000 a week. Phillipa Yalden reports.
Cigarette and tobacco robberies are set to get worse, experts say.
The increasing value of tobacco has created a flourishing black market, leaving dairies with little option but to fortify or abandon the product.
Aggravated robberies jumped
87 per cent in the year to May 2017, with more than 1200 counted nationwide.
On Tuesday, a Hamilton East dairy owner was severely injured by a machete-wielding robber.
The Te Kowhai Food Centre, subject to at least 10 robberies, has abandoned tobacco and its $700 weekly income.
More police boots on the ground are a promised a solution, but many are convinced nothing will change as Government ratchets up the cost of tobacco.
University of Victoria Wellington senior criminology lecturer Trevor Bradley said the problem will certainly get worse.
‘‘Unless we get to the point where the dairies in significant numbers say, ‘no more, we’re not selling this any more’.’’
A black market for cigarettes has only been bolstered by the rising price, he said.
Tobacco taxes were bumped another 10 per cent this year, and a rise scheduled to increase to 2020.
‘‘It’s not 100 per cent responsible, there’s wider contextual factors at play here.
‘‘At the price – $30 for a packet of cigarettes – you’ve got very significant demand . . . such that stolen tobacco wouldn’t be waiting around for very long at all.’’
Tobacco tax – which generates
$1.9 billion in revenue – does contribute to a reduction in the smoking population, with the number of smokers falling from
16.3 per cent in 2012 to 13.8 per cent in 2017.
A commonly leveraged criticism, Bradley said, is the tax makes tobacco inaccessible to the people who can least afford them.
The long-term solution to rising robberies is the same offered by the tax: reduce the demand for cigarettes.
The short-term solution? ‘‘Target hardening’’ dairies in ways similar to a bank or jewellery store, which has substantially reduced robberies for cash and gold.
As part of a governmentsubsidised push, about 20 dairies have so far had fog cannons installed, with another 17 signed up.
But fog cannons don’t always work. On March 8, armed thieves were not deterred by a fog cannon released as they forced entry into a Hillcrest Caltex service station. The staff member fled into a staff room, and the men left with cigarettes and the till.
‘‘You set up a fog cannon, CCTV cameras . . . You can put in all the target hardening measures you like into these dairies but people are still taking these great risks,’’ Bradley said.
Dave Hooker, director of New Zealand Association of Convenience Stores (NZACS), agreed the value of cigarettes is driving the increase in robberies.
‘‘I can’t see it getting any better, with the increased taxation and increased value . . . there’s nothing to say the black market activity won’t increase also. That was the experience in Australia.’’
The NZACS represents service stations but has no individual dairies as members. Cigarettes remained an important profit for convenience stores, and the association does not advocate taking them off the shelves.
‘‘We’re trying to encourage the Government to settle the legislation around vaping, which has been in the market for quite a few years and is a much less harmful alternative to smoking.
‘‘It will eventually decrease the demand for tobacco, and may see smaller displays, smaller stock holdings, and may lead to a point where people are able to run a convenience store and not sell tobacco.’’
In February, Police Minister Stuart Nash hit the streets of Manurewa to encourage dairy owners to install fog cannons at a government-subsidised cost of $250.
In a statement in response to an interview request, Nash spoke of the promised 1800 new police officers in the next three years, with seven who graduated last week headed to the Waikato.
‘‘While we are devoting more funds to police on the frontline, we also know there is a bigger picture.
‘‘That’s why we are giving greater attention to mental health and addiction services, and stepping up efforts to tackle homelessness.’’
Nash’s communication adviser said the minister would not comment on dairies abandoning cigarettes, and cigarette tax hikes were outside the scope of his portfolios.
Nash also holds both the small business and revenue portfolios.
The associate health minister responsible for tobacco, Jenny Salesa, said in an emailed statement that the Ministry of Health will commission an independent evaluation on the impact of tobacco tax increases.
‘‘This work will include any unintended consequences of tobacco price increases, such as an increase in crime, including illicit trade, as well as the financial impact of smokers and their families.’’
The evaluation is due before the end of the year.
Dairies that have taken tobacco off their shelves in the face of relentless robberies are paying a hefty price to stay safe.
One Waikato business is trying to diversify and get by on local patronage while another has taken the hard line as a last defence in what they believe is their downfall.
Both convenience stores made the bold move to deter robbers after being repeatedly hit by thieves.
Cigarettes are often the prime prize of criminals targeting dairies and service stations around the country.
Te Kowhai Food Centre, a country store 15 minutes drive from Hamilton, went smoke free last September after being subjected to at least 10 armed robberies and ram raids.
The move has cost the dairy around $700 a week but owner Tao Liu says taking the hit is worth it to protect his family and staff.
Co-owner Candy Tang said the store was experiencing 20 per cent less turnover than the same time last year.
The business had been selling an estimated 30 packets of cigarettes a day. An average packet of cigarettes now costs around $26.
At a margin of 10 per cent, Tang said they were losing roughly $78 a day, leaving them around $13,500 out of pocket in six months.
But Tang said it wasn’t only the loss from cigarette sales – customers who popped in to purchase smokes also bought other grocery items.
‘‘And some customers don’t come in because we don’t sell cigarettes anymore.’’
Last year their employee was chased by robbers armed with an axe. The offenders went on to take $8000 in cigarettes and tobacco. That was the final straw. Staff safety was the priority, Tang said. They haven’t been hit by robbers since they went smoke free.
‘‘We do feel safer, and we still think we are doing the right thing.
‘‘All of the robberies on our shop were for cigarettes so we think maybe they’re not interested in the other stuff.’’
Tax on tobacco products went up 10 per cent for the second year in a row on January 1 as part of the Government’s plan to make the country smoke free by 2025.
‘‘I don’t believe people will stop smoking even if cigarettes are really expensive,’’ Tang said. ‘‘Some may smoke less but you can’t stop all of the people smoking. No matter how the government taxes them, the better way is to ban selling cigarettes or sell them at a special place and not in the community’s shops.’’
High prices were driving robbers to commit crimes to onsell cigarettes on a black market, Tang said.
In Hamilton, Palmerston St Mini Mart is no longer selling cigarettes to strangers.
The store worker, who would not be named, took to sleeping armed with a bat in the store last year to protect his family’s livelihood. Since then he’s tried to sell up and move on but no one is buying. Fearful of thieves, he’s cut his opening hours to afternoons and closes at the weekend.
And, after another recent break-in, has decided to empty the cigarette trays.
He believes the thieves were casing the store to check whether they stocked cigarettes before committing the crimes.
‘‘If we don’t have cigarettes nobody will come to the shop.
‘‘We only make $2 or $3 on cigarettes. The cheapest packet in New Zealand is $21.50, the rest are all over $25.50.’’
The city store typically sold around 40 packets a day, he said.
‘‘Sometimes they come to buy a drink, milk and bread with cigarettes – if we have no cigarettes they can go to Pak ’n Save because it’s cheap.’’
Many dairy owners were trying to sell up, he said. His friend’s city store was turning over $3000 a week, yet he still couldn’t sell.
‘‘I’m hoping for peace, I just want an easy job where I can smile and be happy everyday, but now I’m nervous.’’
Te Kowhai Food Centre worker Robert Mao said the Te Kowhai community had fully supported the move.
‘‘Every day they tell us that stopping selling cigarettes was a really good choice.
‘‘They still come here to buy a lot of groceries. We’re really pleased and grateful to the local people.’’
It was already tough trying to keep a corner dairy afloat in the face of strong supermarket competition, he said.
In order to recoup some of the losses the store was looking to extend the menu of the neighbouring takeaways and introduce a new chicken and chips lunch special sold inside the food centre.
‘‘We’re still going on because we own the building, so it’s not too hard at this stage,’’ Tang said.
Tao Liu has taken a hit since he stopped selling cigarettes at the Te Kowhai Food Centre, near Hamilton.
The owners of Palmerston Mini Mart have taken cigarettes off the shelves.