A Newshub investigation has found tobacco is being illegally sold from private homes, with sellers openly marketing products on social media using codenames to avoid detection.
The director of the smoke-free advocacy harm group ASH Ben Youdan says there's been a "steady rise" in black market sales of tobacco in NZ.
Newshub found the Tongan term for processing tobacco 'malila' is used online to market illicit products and avoid algorithms that could lead to such pages being shut down. And it's not just homegrown sales that are worrying authorities.
At the border, Customs says illicit tobacco being imported by organised crime groups to New Zealand makes up around 80 percent of their fraud team's work.
It was a simple but illegal transaction at a house in the Auckland suburb of Glen Innes where the seller told Newshub the product we purchased was "homegrown" tobacco.
The law stipulates that you can grow 5 kilograms of tobacco for personal use. But selling, or even giving it away, is prohibited unless you're registered with Customs and pay excise tax.
The seller at the Glen Innes property told Newshub he doesn't pay tax and "it's all good".
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Any tobacco sold is also supposed to have health warnings. This product had nothing. So we drove to another private seller - this time in Mangere. On arrival we discovered it was the same price as the last house. Just $10 per bag.
Last stop was a house in Mount Roskill. It was the same situation. We walked away with the product, which was unbranded and had no health warnings.
All three sellers advertised on Facebook. They didn't market products under the names tobacco or cigarettes but used the Tongan name 'malila'.
Director of ASH Ben Youden said using slang terms is a common method of avoiding detection.
"Facebook uses algorithms which stop you from selling anything associated with tobacco, so cigarettes, tobacco. But it's often not sophisticated enough to pick up some of the colloquial terms," he said.
He said these types of sales are increasing.
"Even within my own neighbourhood, I can find seven or eight different sources within about five minutes," he said.
Youden said relative to household income, cigarettes in New Zealand cost more than anywhere in the world.
He'd like to see the government do more work on promoting "constructive" alternatives like vaping.
"We really need to see the government put much more into actually supporting people to manage withdrawal, and into communities to supporting people to be smokefree so that as the legitimate supply is reduced it is not replaced with illegitimate supply."
We asked experts at Customs to inspect the products Newshub purchased.
Chief Customs officer with the fraud and prohibited goods team Nigel Barnes told Newshub "on the face of it" the product was being sold illegally, as it was unlikely excise tax had been paid.
"The packaging is simply a plastic bag. There are no health warnings or anything on it and that's often a red flag that you're dealing with illicit tobacco."
The Health Ministry told Newshub: "The example you are providing does not comply with the requirements in several ways, and we are concerned to see that."
But of more concern is organised crime groups. Gangs predominantly in southeast Asia are targeting New Zealand with illegal tobacco.
Since 2021, 47 percent of illegal seizures made by Customs have originated in China.
Customs investigations manager Cam Moore told Newshub it's an "emerging crime genre for us".
"I think we're looking at about a dollar per cigarette. So 1 million cigarettes, $1 million."
It's big money. In 2018, in an operation called 'Whitehorn', Customs found $4 million in cash - all linked to illegal tobacco sales.
Moore said there are also parallels to the sophistication seen with smuggling meth, with international criminals setting up fake companies.
"They might call it Mike Morrah's Building Supplies. They will then bring in an import, a consignment of goods that might at face value be building supplies. But within that they will conceal illegal products such as tobacco."
Customs is also seizing more commercial equipment like cigarette rolling and canning machines.
The Customs fraud team focuses on anything from falsification of documents, to bank cards and alcohol excise fraud. But illegal tobacco dominates and now comprises around 80 percent of their work.
A new dedicated Customs tobacco investigation team will be operational next year - key to combating a crime that threatens our Smokefree 2025 ambitions.
