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Duty-Free Tobacco Sales Challenged in New Zealand

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  Published in Travel and Leisure on Sunday, February 1st 2026 at 19:19 GMT by rnz
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Auckland, New Zealand - February 2nd, 2026 - A recently published report from the Auckland University's Centre for Addiction Research is reigniting debate surrounding the continued sale of duty-free tobacco in New Zealand. The report argues that allowing tourists to purchase tobacco at drastically reduced prices actively hinders national efforts to curb smoking rates, places a disproportionate burden on vulnerable communities, and represents a significant loss of potential tax revenue for the government. The findings come at a critical juncture as the Ministry of Health currently reviews the policy, with mounting calls for a complete ban.

The discrepancy in pricing is stark. Currently, a standard packet of cigarettes retails for approximately $38.40 within New Zealand. However, the same packet, purchased duty-free, can be obtained for just $20. This nearly 50% price reduction creates a loophole that undermines the effectiveness of New Zealand's comprehensive tobacco control strategies, which include high excise taxes designed to discourage consumption.

"The logic behind progressively increasing tobacco taxes is simple: higher prices reduce demand," explains Professor Nick Wilson, lead researcher on the report. "However, this logic is severely compromised when a significant segment of the market - tourists - can access tobacco at significantly lower prices. It's essentially a subsidy for smoking, and it directly contradicts our national health goals."

New Zealand has long been a leader in tobacco control, enacting some of the most stringent regulations in the world. These measures include plain packaging, restrictions on advertising and promotion, and ongoing increases in excise duty. However, the existence of duty-free tobacco creates a parallel market that erodes the impact of these initiatives. Tourists, incentivized by the lower prices, may purchase larger quantities of tobacco to either consume during their stay or smuggle back home, further exacerbating the problem.

The report emphasizes the particularly damaging effect on Maori and Pacific communities, which consistently experience higher rates of smoking than the national average. These communities already bear a disproportionate burden of tobacco-related illnesses and premature mortality. The availability of cheaper duty-free tobacco further entrenches these health inequities, making it even harder to achieve equitable health outcomes.

"For these communities, every dollar counts," Professor Wilson states. "The lower prices offered duty-free simply amplify the appeal of tobacco, making it more difficult for individuals to quit and preventing future generations from taking up the habit. It's a matter of social justice as much as it is public health."

The financial implications of maintaining duty-free tobacco sales are also substantial. The government forgoes significant tax revenue that could be reinvested in crucial healthcare services, including smoking cessation programs and cancer treatment. While the exact amount is difficult to quantify, researchers estimate the annual loss to be in the tens of millions of dollars.

Furthermore, New Zealand stands as an outlier among OECD nations in continuing to permit duty-free tobacco sales. Most developed countries have already eliminated this practice, recognizing its detrimental effects on public health and fiscal responsibility. A 2024 review of OECD policies found that only a handful of countries still allow duty-free tobacco, often justifying it based on tourism revenue. However, the Auckland University report challenges this rationale, arguing that the long-term healthcare costs associated with increased smoking far outweigh any short-term economic benefits.

The Ministry of Health's current policy review is expected to conclude in the coming months. Advocacy groups are urging the government to adopt a bold and decisive approach, implementing a complete ban on duty-free tobacco sales. They argue that such a measure would send a clear signal that New Zealand is committed to protecting the health of its citizens and creating a smoke-free future. The potential impact on tourism revenue is being carefully considered, but proponents of the ban contend that any negative effects would be minimal and offset by the positive health and economic benefits of reduced smoking rates.