The days of bulk-buying cigarettes at the border are over
after the Government revealed its latest anti-smoking policy
will cut the duty-free allowance from 10 cigarette packs to
The policy is expected to wipe between $7 million and $8
million off Auckland airport's revenue.
Associate Health Minister Tariana Turia said she considered
completely removing the duty-free allowance in next week's
Budget - which health groups have demanded for years - but
was concerned about the huge increase in workload for
Instead, travellers entering New Zealand after October would
have their tax-free allowance cut from 200 cigarettes to 50,
or 50g of tobacco or cigars. Tobacco imported from overseas
would no longer get a gift concession and would be subject to
a duty and GST tax.
The changes will raise $50 million in additional tax revenue
a year, while costing just $2.7 million in initial compliance
Auckland Airport's general manager of retail, Richard Barker,
said the airport would inform travellers of the proposed
"Auckland Airport estimates that the potential full-year
impact of reducing the duty-free allowance ... could reduce
the company's revenue by approximately $7 million to $8
million," he said.
British American Tobacco, which sell Benson & Hedges,
Dunhill and other tobacco brands, said the change would have
a small impact. Spokeswoman Dawn O'Connor said around 2 per
cent of its sales were duty-free.
She predicted the damage to New Zealand's tourism brand would
be greater, because it put the country at an economic
Australia made the same policy change in 2012. A spokesman
for Duty Free Stores New Zealand, an Australasian company,
said tobacco sales had since fallen in Australian outlets but
the impact had been absorbed through sales of other products.
The Government hiked tobacco taxes 10 per cent in 2013 and
2014, and plans further increases next year and in 2016.
A New Zealand Medical Journal study showed that the importing
of duty-free cigarettes had ballooned since the tax hikes,
with missed tax revenue jumping from $38 million in 2008 to
$89.1 million in 2012.
Duty-free allowance cut from 200 cigarettes to 50 cigarettes;
gift duty introduced (2014).
Four annual tobacco tax hikes of 10 per cent from 2012,
increasing price of 20-pack from $14 to more than $20 (2012).
Tobacco products and advertising must be hidden in stores
Plain packets for tobacco (before Parliament, contingent on
overseas legal cases).
- Isaac Davison of the New Zealand Herald