The tobacco black market

Stuff reports:

A lucrative black market for cigarettes is fuelling an increase in armed robberies, with criminals targeting dairies and stealing products to order.

Some dairy owners are toying with the idea of pulling cigarettes from their shelves, but the decision is not an easy one with tobacco products making up a large amount of their business.

In the last seven weeks, robbers have targeted at least 17 Christchurch businesses, including dairies, pubs and bakeries. That compares to 12 in the first five months of the year. …

Detective Senior Sergeant Mike Ford said he believed many of the robbers were stealing to order rather than for personal use.

“There appears to be a strong black market for tobacco. It is a very valuable commodity. They [the robbers] are taking as much as they can.”

I’m a supporter of increasing excise tax on tobacco to reduce the numbers who smoke (so long as other taxes reduce, so not an overall revenue gain). But this story is a useful reminder that every police has unintended consequences, and the higher the tax goes, the more lucrative the black market becomes. Hence total prohibition would also lead to a larger black market controlled by criminals.

Comments (49)

Login to comment or vote