Casey Costello's tobacco tax comments concerns experts, minister says no reduction

Experts are crying foul at a suggestion from the associate health minister she'll consider reviewing the excise structure on tobacco.

Associate Minister Casey Costello told Newstalk ZB she would consider a review of the excise tax.

"I'm considering a review of the excise, and that's what we took forward to cabinet, that it's time that we started to consider a review on how our excise structure is for all of these products," she said.

It comes amid growing concerns about the black market tobacco trade in New Zealand.

RNZ has been investigating the issue, finding illicit cigarettes sold over the counter in Auckland at a fraction of the regular price.

They have none of the health warnings and Quitline information, as required by law, and one East Auckland store was selling a packet of cigarettes for as cheap as $13, less than half the excise tax that must be paid.

Health Coalition Aotearoa said tinkering with excise tax was "foolhardy".

Otago University public health professor and spokesperson for the coalition's expert advisory group on smoking Janet Hoek said tobacco excise tax was a key factor in prompting smokers to quit and a deterrent for young people.

"It's incredibly cheap to produce illicit tobacco," she said.

"Any efforts to reduce the excise tax, will inevitably get into some kind of a bidding war that the Government will not be able to win."

Last week, the government's Action Group on illicit tobacco announced its first combined operation to disrupt the tobacco black market.

They arrested five people, and seized 1.3 million cigarettes, which they said represented more than $2 million dollars in evaded tobacco excise.

Hoek said there was more the Government could be doing to combat the black market. A start could be agreeing to the World Health Organisation's protocol on eliminating illicit trade in tobacco products, she said

"Obviously we should accede to that protocol," Hoek said.

"One requirement that it sets out is that every single point within the supply chain needs to be licensed."

New Zealand needed a licensing mechanism to provide information on each point of the supply chain, she said.

"We need to have much stronger border enforcement, so that means investing in technologies that can have more advanced scanning and more frequent scanning of high risk shipments coming in," Hoek said.

She also wanted to see much greater scrutiny of retailers selling tobacco, as well as greater powers for smokefree enforcement officers to seize product, issue fines, and shut stores.

Importing cigarettes without paying the excise duty is illegal, as is selling illicit smokes, and offenders can face a $20,000 fine, prison time, or both.

"We need to have much higher penalties for retailers who do sell illicit product," Hoek said.

"At the moment it's a little bit like a slap on the wrist with a wet bus ticket, we need to be able to close premises and impose fines that really act as a deterrent."

Costello told RNZ she had no intention of reducing tobacco excise, nor had she talked about it.

"I want to see policies in place that stop people smoking and stop the supply of illicit cigarettes and tobacco," she said.

"That's what I'm working on."