New Zealand announces 40% hike in tobacco taxes


Thursday 24 May 2012 14:57 BST

New Zealand's government has squeezed smokers more than ever by announcing a 40% hike in tobacco taxes over the next four years.

Prices there are already among the highest in the world, and by 2016 they will top 20 New Zealand dollars (£9.60) a pack on average.

Officials hope higher taxes and new restrictions will bring the nation of 4.4 million closer to a recent pledge to snuff out the habit entirely by 2025. Other countries have lauded the idea of trying to wean their populace off tobacco, but few, if any, have been willing to put a date on it.

Health officials even considered raising the cost of a pack of cigarettes to 100 New Zealand dollars (£48). Although that idea was dismissed, another measure, which will force retailers to hide cigarettes below the counter rather than putting them on display, will come into effect in July.

Smoking rates among New Zealand adults have fallen from about 30% in 1986 to about 20% today. Cigarette sales have fallen more sharply, suggesting that even people who still smoke have cut back.

Opponents say the hikes could drive some low-income people to commit crime to support their habit. They want the government to provide more support and alternatives to smokers if it is serious about making them quit.

The New Zealand branch of cigarette company British American Tobacco said the tax increases will force consumers to turn to the black market.

Susan Jones, head of corporate and regulatory affairs, said: "Consumer demand is far better served by legitimate companies than by the illegal operators that will surely grow as the government makes it increasingly difficult for people to buy their product of choice."

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