Prime Minister Christopher Luxon says it's a "natural reality" that a black market would emerge if there was a limit on the number of stores that sell cigarettes to Kiwis.
Luxon has pointed to a potential black market as justification for repealing parts of the last government's smokefree legislation.
The law would have reduced the number of outlets selling tobacco products from about 6000 nationwide to about 600.
On Breakfast this morning, Luxon said: "Limiting distribution to 600 outlets across the whole of the country does mean that there will be towns up and down New Zealand that have just one or two outlets in them.
"They'll become massive magnets for crime and retail crime, as we've already seen... and also ultimately encourage a black market."
But when pressed for the information behind his black market claim, Luxon answered generally.
"The issue very simply is, when you remove distribution points just to 600 across the country, you're going to be creating and putting a lot of sale of cigarettes underground and into the black market – because the reality is, there's gonna be very few outlets in which you can purchase cigarettes from.
"And so, what we really want to see is make sure that we don't make those places targets for crime."
He pointed to recent ram-raid statistics and said the previous government's plan would only have made things worse.
Asked again where the evidence came from about a black market, Luxon said "it's just a natural reality".
"It's just a reality. When you've got less supply, black markets take off across cigarette markets around the world in that case.
"I get there's a difference of opinion about how to deal with this," he added. "Let's be clear, we're not taking anything backwards because this legislation hasn't taken effect.
"It doesn't take effect fully for over three years, as it was planned by the previous Labour government.
"We have a difference of opinion on that, we think the unintended consequences of that policy don't make sense."
But the Government has a "very strong commitment" to driving smoking rates down, Luxon added.
"We just disagree with the previous government's policy, that that's the way to deliver that outcome.
"I know people like to talk about it as world-leading, that's lovely – but actually it hasn't taken effect, it's not been in action, and as I said, we've got a difference of opinion that actually it has unintended consequences that we don't want to see."
It comes after the new Prime Minister was forced to walk back a claim related to the legislation over the weekend.
Luxon had previously claimed that there would only be one tobacco retailer in the whole of Northland under Labour's scrapped smokefree law changes – and senior minister Chris Bishop repeated the claim on Q+A with Jack Tame yesterday.
But Luxon admitted the figure was incorrect yesterday afternoon.
"We got it wrong," he said. "What we meant there and the bigger point very clearly is that the actual policy, the previous Labour government announced, would mean there would be a massive concentration of a few outlets."
According to a Health Ministry gazette notice, there would be a maximum of 35 approved tobacco retailers in the Northland region under the law change — not one.
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