11 June 2026
New research showing illicit tobacco now makes up a third of the New Zealand market reinforces Retail NZ’s own report on illicit tobacco earlier this year, which found immediate action must be taken to stamp out the rapidly growing problem.
FTI Consulting’s Illicit Tobacco in New Zealand 2025 report released today, found 33.5% of all tobacco consumed in New Zealand last year was illicit product, up from 27.2% in 2024. It estimates that, as a result, the government lost $817 million in excise tax and GST.
“While it is alarming that one in every three cigarettes smoked in New Zealand is now illicit product, this, sadly, does not come as a surprise to us,” Retail NZ Chief Executive, Carolyn Young says. “This report confirms what we are increasingly hearing from our members – that there are stores in our communities brazenly selling illicit tobacco products, but the authorities don’t currently have the tools and resources to put a stop to it.”
Retail NZ’s own research into illicit tobacco released earlier this year identified there was a narrow window of opportunity for New Zealand to take decisive action to stamp out the illicit market, with Australia serving as a cautionary example of what could happen if the problem was ignored; it is experiencing rising smoking rates, increasing levels of violence, billions in lost government revenue, and huge sums of money going into the pockets of organised crime networks.
Australia’s Bureau of Statistics last week released its first analysis into the illicit tobacco market and found an estimated 80% of all nicotine products consumed in Australia last year were illegal – up from 12% in 2017.
Carolyn Young says FTI’s report out today can’t be ignored.
“What we can see from all this research is that the illicit market is rapidly growing, and without urgent and rigorous action to tackle the problem, New Zealand could find itself in the same situation as Australia in just a few years,” Ms Young says.
“We know the report will be challenged by some as it was commissioned by tobacco companies, but our advice is we ignore these findings at our peril. Australia’s government turned a blind eye to similar research, and now its own Bureau of Statistics has found four in every five nicotine products consumed there is illegal. We must learn from their mistakes and take this problem seriously.”
Last month, Customs Minister, Casey Costello, announced Customs, New Zealand Police, Health New Zealand, and the Ministry of Health were forming an Action Group to better target and dismantle the illegal tobacco trade.
“The Action Group is an important first step to ensure a cohesive and targeted approach in tackling our growing illicit tobacco problem, but more needs to be done. As a start, New Zealand needs further investment in border protections and intelligence, better enforcement tools, and tougher penalties for those caught importing and selling illicit tobacco,” Ms Young says.
“It is clear the window for New Zealand to take action is rapidly closing. We must act decisively with all the tools at our disposal to have the best chance of success.”
For further information or to set up an interview please contact Carolyn Young on 021 449 452
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