Tobacco Asia

24 tobaccoasia Issue 6, 2026 November / December New Zealand is not immune It would be wrong, however, to call New Zealand a clean success. One of Hooker's own presentation slides at GTNF was headed "Illicit tobacco – present and growing @ 33%." An FTI Consulting report commissioned by industry indeed found that 33.5% of tobacco consumed in 2025 was illicit, up from 27.2% a year earlier. However, in- dependent research in 2023 had suggested only 5 to 7%, so, depending on the source, estimates differ widely. New Zealand Customs says seizures this year have already reached nearly 12 million cigarettes and cigars, and the government created a multi- agency Illicit Tobacco Action Group in May. Meanwhile, New Zealand Customs has called the country's trajectory "particu- larly concerning," noting that Australia and New Zealand have the highest excise rates in the region. Said David Hooker: "As [crime groups] are getting pressure in Australia, they're starting to turn up in New Zealand." As in Australia, New Zealand smoking de- clines have stalled, with the rate flat near 6.8% since 2022/23 and the Smokefree 2025 target narrowly missed. New Zealand's problem is less pronounced than Australia's, but not absent. Green shoots in Australia But recent reforms in Australia are beginning to show results. AACS credits its ad- vocacy with more than 1,000 stores shut for infringements for 28 to 90 days across Queensland, South Australia, New South Wales, and Western Australia, A$500 million in enforcement funding, two parliamentary inquiries, licensing that strips offenders of the right to sell tobacco, 12-month closures, landlord lease termination rights, fines of A$1 million-A$4 million, and a public register of closed stores. Circana data shows legal sales down only 10.8% in value in the first half of 2026, against 25.1% a year earlier, with the second quarter positive. Queensland was up 44% in value in Q2, a number Foukkare was careful to caveat. The logic is simple: shutting a shop attacks the street-level choke point, and license loss is a penalty a fine never was. One clarification is needed, however: The reforms were driven largely by state governments and a federal government under sustained pressure, while the coalition opposition now campaigns on the issue and, as Foukkare noted, hopes for an election win in about 18 months. Fragile gains and a divided debate But Australia's recovery is uneven and may not last. Queensland has about 150 staff clos- ing stores daily, yet Foukkare admitted officials say they "can't maintain this." "Once you pull off the accelerator," he warned, illicit outlets "will start to pop up again." Enforcement is also costly where police face competing priorities. Hence the political split, where the government favors enforcement while the opposition proposes cutting excise by 80%, which would take a 20-pack from around A$30 down to A$6. But Cancer Council Aus- tralia argues that cheaper tobacco would raise consumption and industry profit while the illicit market persists. Fouk- kare's own view is that "enforcement alone doesn't work" and that "until you address the cause or causes, you can't ad- dress it properly." The verdict The two Asia-Pacific neighbors prove less that one model is virtuous and the other broken than that tobacco policy has limits. Australia's early innovations were sound. Its mistake was too quickly and too frequently layering ever-higher prices onto a market that had no legal outlet for alternatives, creating an irresist- ible target for organized crime. On the other hand, New Zealand's moderate excise path, legal vaping mar- ket and willingness to reverse its most radical rules bought it time, but Hooker's 33% figure shows the clock is running. As Foukkare framed the choice, govern- ments must decide whether to "support a legal industry that employs Austra- lians that pay their taxes" or the criminal groups that fill any vacuum. Success, in both countries, may depend on keeping the legal market competitive while mak- ing the illegal one genuinely costly. Sources: Presentations by Theo Foukkare (AACS) and David Hooker (NZACS) at GTNF Lisbon, 2026; Australian Bureau of Statistics (ABS), "Household consumption of illicit tobacco and nicotine products" (3 June 2026); The Nightly / Bunbury Herald, "Australia nicotine consumption skyrockets 40 per cent since 2017" (June 2026); Michael West Media, "New data lights up enormity of tobacco black market" (3 June 2026); The Spectator Australia, "Aussie Life" (27 June 2026); Cancer Council Australia media release (5 June 2026); 1News (NZ), "Fears NZ's tobacco black market will get as bad as Australia's" (16 March 2026) and "Organised crime eyes 'fat profit' in NZ's 'attractive' illicit tobacco market" (10 September 2026); Retail NZ media release on FTI Consulting's "Illicit Tobacco in New Zealand 2025" (11 June 2026); The Guardian, "New Zealand smoking rates fall to lowest on record" (2022); Tobacco Insider, Australia & NZ regulatory update. From left to right: Moderator Beth Oliva, Theo Foukkare, and David Hooker during their GTNF session. Credit: Thomas Schmid

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