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.

Waikato Times - - Front Page - THOMAS MANCH

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.

PHO­TOS: CHRISTEL YARDLEY/STUFF

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.

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