The Ministry of Health has not prosecuted anyone in the last year for breaching tobacco packaging rules - despite RNZ learning a suburban dairy is selling blackmarket cigarettes.
By Finn Blackwell of RNZ
RNZ has been investigating since March and has identified shops in Auckland allegedly selling illicit cigarettes.
An East Auckland store was charging just $13 for a pack - less than half the excise duty required by law.
Importing cigarettes without paying the excise duty is illegal, and offenders can be charged with defrauding customs revenue.
It is also illegal for retailers to sell illicit cigarettes, with offenders facing a maximum six-month prison sentence, a $20,000 fine, or both.
RNZ visited a Papakura shop selling blackmarket cigarettes.
After picking up a can of soft drink and asking at the counter for "cheap smokes", a reporter was quickly handed a packet of Hongtashan cigarettes - a high-end brand from China - from under the counter.
Its packaging was white, with red font and gold accents. It included a health warning in Chinese but none of the images, warnings, or quitting information that should cover at least 75% of the front of the packet under NZ law.
The total came out to just $17.
A URL printed on the packet also appeared not to work.
The Ministry of Health and Health New Zealand both enforce smokefree legislation, including checking retail compliance on under-age sales and non-compliant packaging.
A spokesperson for the Ministry said over the past 12 months, no prosecutions had been undertaken into breaches of tobacco packaging rules - an enforceable indicator of illicit tobacco.
There had been four prosecutions involving non-compliant packaging in 2024 and early 2025. Two involved suspected illicitly-imported tobacco.
"The Government is concerned about the supply of illicit tobacco," the Ministry spokesperson said. "These products undermine our efforts to stop people from smoking, and they affect legitimate businesses and tax revenue.
"When it comes to packaging requirements, we generally take an educational approach to ensure retailers are aware that they must not sell products that do not meet the requirements.
However, when it is clear there is intentional offending, we can undertake a prosecution."
In 2025, Customs seized 11.1 million illicit cigarettes and cigars - up from 9.2 million in 2024, 8.48 million in 2023 and 4.8 million in 2022.
Seizures of illicit cigarettes and cigars in 2017 amounted to just over 3 million.
Ben Youdan from Action for Smokefree Aotearoa - ASH - said the accessibility of blackmarket cigarettes was growing.
"The issue for them is that they're probably most available in communities which still have the highest smoking rates, so really targeting those people who are still smoking, addicted to cigarettes, but for whom the financial hardship from that addiction is hitting them hardest," he said.
It was a complex issue to tackle, Youdan said.
"It's not just about having one agency that's responsible," he said.
"I think we need to be much better at coordinating across the agencies which have a stake in the tobacco supply chain, and ultimately in the revenue collection, and the health of people as well."
Youdan didn't think that coordination had been done "especially well".
In May, the Government announced the formation a blackmarket tobacco 'action group' with Customs, police and health officials sharing information, planning and conducting operations together.
RNZ asked police if they had taken any action as part of the Government's action group on illicit tobacco. They referred us to Customs.
Customs said it hoped the new action group will deliver results in the coming weeks and months
"Some of the things we want to do, for example, is involve the police asset recovery unit in recovering the ill-gotten gains from some of these organised criminals, and that does take longer than a few weeks," said Nigel Barnes, chief Customs officer for fraud and prohibition.
But the Dairy and Business Owners Group's Ash Parmar said there needs to be more action from authorities.
"Police should at the least walk into the shop and tell them, look them in the eye and say 'hey what you're doing is illegal'," he said.
"I don't see why they can't do that, at least go give them a warning."
There needs to be an easier way to report to health officials, he said.
"If the Government are serious about it, there needs to be some sort of hotline or tipline where they can make a complaint discretely, and then Customs or police should take action on it immediately," Parmar said.
Parmar knew of a number of dairies selling the illicit product.
"If [police] want to pick up the phone and say, 'Hey, take me to five shops, identify them,' I mean, they should be doing their job in identifying it themselves, but I'll be the first person to point to the shops who are doing it, as long as they're actually going to do something about it."
RNZ gave the Ministry of Health 48 hours to respond to an interview request but it did respond by deadline.
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