Dodgy durries: Inside New Zealand’s booming illicit tobacco trade

Sunday, 7 June 2026

A thriving illicit tobacco market is now operating openly in New Zealand. While agencies debate who is responsible, private investigators have mapped alleged supply networks that continue expanding across the North Island. Jonathan Killick investigates.

“They’re open every day, no matter if it’s sunshine or tsunami warning,” says social media influencer Uncle Ray.

Walking through a “gift shop” in Glen Innes, he broadcasts the store’s colourful range of what appears to be contraband to his 20,000 followers.

“There’s Manchester, red, blue and white,” says Ray. “And the homeboy said the more you buy, they’re going to give me a freebie.

“Thank you my son,” he says as he’s handed a 25-gram pouch of tobacco in a Glad sandwich bag.

The store also has 100 gram bags on display for $50 - the proper excise for which would be $186.

“If you buy that at a normal shop, it’ll cost you an arm and a leg, but over here it’s a piece of piss,” says Ray.

And despite the apparent illicit nature of the product, Ray isn’t shy about promoting it online, telling viewers: “Double Happiness, it doubles your happiness. It’s better than making love.”

He defended his promotion to the Sunday Star-Times, saying: “Although illegal, it’s cheaper and the customer drove kms to buy bulk.”

Six months on from a Star-Times investigation which used mystery shoppers to expose Auckland dairies covertly selling illicit cigarettes, the trade has now become much more brazen.

The premises shown by Uncle Ray is one of several “pop-up shops” that have spread across the North Island in what experts are warning is the next phase of a criminal takeover of the domestic tobacco market.

A recent survey estimates that a third of tobacco consumed in New Zealand is now illicit, resulting in $817 million in lost tax in 2025.

The Star-Times visited multiple pop-up shop locations in South and East Auckland and it quickly became apparent there was a roaring trade under way with many customers seen walking out with cigarette packets without health warnings. On one visit to the Glen Innes store, a woman on the street was seen selling a packet from a backpack to a girl in school uniform.

Despite the glaring nature of this new wave of untaxed tobacco, it can be revealed that in the year ending March the Ministry of Health did not undertake any enforcement action against retailers under Smokefree legislation.

Part of the issue appears to be a fragmentation of jurisdiction with no agency having a clear responsibility for disrupting domestic supply chains once products have entered the country.

With authorities floundering, private entities have taken up the mantle - with the Star-Times having obtained an externally commissioned private investigators report detailing a supply chain hidden in plain sight.

It contains images and surveillance reports identifying key individuals - including a prolific Hamilton graffiti artist known as “Nimbus” - as well as warehouses and storage sites across Auckland and Waikato.

North Island supply chain revealed

As private investigators spent six weeks tailing the person they believe to be a main actor in one of several identified illicit distribution networks, they say they noticed “surveillance aware” behaviour.

This included “abrupt U-turns, block-circling, route diversions, remote lay-by stops, motorway split manoeuvres and deliberate counter-surveillance techniques”.

But their efforts turned up a network of stores seemingly leased from private landlords in Onehunga, Glen Innes, Rotorua, Hamilton and Te Kuiti.

They say that the Glen Innes store is most likely the central node in the network, with “agents observing multiple rear-door deliveries to the premises”.

Although the main actor’s identity is not known, the investigators have named who they believe is the key figure, “BP”, after letters tattooed on the back of his forearm.

Investigators say BP was consistently observed using a white Toyota HiAce van to move stock between storage facilities and stores across multiple regions.

Their report includes screenshots of footage showing boxes being unloaded from storage lock-ups in Ellerslie, Onehunga and Hamilton.

“The use of multiple storage facilities indicates deliberate compartmentalisation of stock,” the investigators say.

Investigators also say they believe a graffiti artist is associated with the operation who uses the name “Nimbus” - a tag seen prolifically throughout the North Island and in some locations in Melbourne and Sydney.

A social media account linked to the Nimbus tag also appears to run an online business selling a range of water pipe “bongs” made from Kmart materials.

The bongs were visible in various pop-up illicit tobacco shops along with Nimbus’ graffiti on walls and doorframes.

The Star-Times has attempted to seek comment on these allegations by leaving messages with staff in two pop-up stores and through a social media account linked to the Nimbus artist.

There was no response to the in store messages but there was one received via the Nimbus social media account.

“My focus has been on transitioning away from vandalism and towards legitimate artistic work including mural and commissioned pieces,” the man said.

“Beyond that, I don’t have anything further to add regarding the matters you’ve raised.”

But investigators say that as recently as March they observed BP emerging from a site up for lease on New North Rd in Mt Albert, which they suspect could be the latest expansion in the network.

“There is a strong possibility that additional sites already exist,” they say.

Organised crime sets up shop on high streets

Meanwhile, in Te Kuiti, dairy owner Hemant Patel says his store’s turnover has dropped by half since an illicit pop-up shop emerged nearby.

“It’s a dangerous situation for my business,” says Patel. “They [the pop-up shops] don’t have any Eftpos so there are lots of people coming for the cash out in our shop and spending over there.”

And Patel is concerned about the criminal element the trade has brought to Te Kuiti.

“It’s bad for the town, it’s bad for us too,” he says. “I think I’ve called Health NZ 10 times about it. They’re coming to our shop to see we’re not selling [cigarettes] to underage people, but they’re not coming down on [a shop] selling them illegally.”

That experience echoes a recent report by Retail NZ that urged the Government to “pull every lever available” to prevent the illicit market becoming entrenched after hearing reports that complaints to authorities were falling on deaf ears.

The report cites a member who was left “frustrated” after being told Health NZ lacked statutory power to seize stock. It claimed Customs did not have jurisdiction over domestic circulation while police did not consider it a high priority.

The Star-Times asked Health NZ for a breakdown on how many complaints it had received via its tip-box website in the last year and how many had resulted in follow-up and enforcement.

In the year ending March 31 there had been 136 complaints which resulted in 93 visits from a Smokefree enforcement officer. Health NZ said cases were then referred to the Ministry of Health for potential enforcement.

The ministry took 20 working days to tell the Star-Times it didn’t know how many had resulted in enforcement because “referrals do not consistently provide information about whether this resulted from complaints”.

So, the Star-Times asked the ministry how many cases in total it had taken enforcement action on in the last year. The answer was none.

“We initially take an educational approach to ensure retailers are aware of any products that may not meet the requirements,” a spokesperson says.

“While we have not undertaken any prosecutions into breaches of tobacco packaging rules in the last 12 months, there were four prosecutions involving non-compliant packaging in 2024 and early 2025,” they say.

As Health NZ takes an “education approach” Retail NZ warns that “illicit tobacco vendors have quite literally set up shop on our high streets exposing the public and legitimate vendors to the coercion and territorial disputes of criminal syndicates.”

Retail NZ chief executive Carolyn Young has been calling for an “immediate and rigorous crackdown” saying she has “grave concerns” for stores.

She worries that New Zealand could be following in the footsteps of Australia where gangs now openly fight for control of supply to corner shops, with more than 200 fire-bombing incidents reported.

“The growth of the illicit market and related violence escalated quickly in Australia, and Retail NZ fears the same could happen here if immediate action isn’t taken,” says Young.

She believes the Government has a “narrow window” in which to stamp out the market before it becomes entrenched.

“If the growth in this illicit market is left unchecked, the violence that goes hand-in-hand with organised crime will spill onto our high streets.”

Kingsley Wheaton, global chief corporate officer for British American Tobacco, tells the Star-Times he believes that on its current trajectory New Zealand is around two years behind Australia.

The tobacco industry conducts an “empty packet survey” in which 2000 discarded cartons are collected in six of the largest cities in New Zealand to see what people are smoking.

The latest survey, which will be released next week, suggests that 33.5% of tobacco consumed in Aotearoa is now illicit, up from 27.2% in 2024.

Wheaton says the global average is around 15%, while Australia has now nearly reached 75% or three out four cigarettes sold.

“New Zealand disappearing into an Australia-like hole is something you would wish to avoid,” says Wheaton.

Not just a cheap pack of ciggies

In 2025, NZ Customs seized nearly 15 million illegal cigarettes and eight tonnes of illicit loose tobacco at the border. It’s a significant number, but its barely a dent acknowledges Customs Minister Casey Costello.

“With tobacco, it’s just about volume; it’s a scattergun approach and if they lose one container, they’ll just keep pushing forward,” she says.

“Effectively we’re in a position where if there is a legitimate supply chain, there will be an illicit supply chain that comes in behind it.”

That’s backed up by the private investigators’ experience, who followed BP to a warehouse in South Auckland where they say he picked up a load of boxes.

When the Star-Times visited, labels on packaging suggested the warehouse was an importer bringing in everything from children’s toys to household goods. One shipping container appeared to have food and drink inside.

As a reporter followed a van on a delivery run, it visited several vape shops and corner dairies - but until someone with the authority to search those boxes opens them, their contents remain elusive.

So why haven’t Customs officers or Health NZ acted on this intelligence?

Costello says she is aware that the enforcement regime is “complex” due to different agencies having “different roles and responsibilities”.

“The compliance team [at Health NZ] was almost non-existent when we came in,” she says. “They’re doing a lot more … but they can only deal with displays and selling to under 18s.”

“Early last month I asked the agencies to come together to develop an operational plan,” she says, announcing that Health, Police and Customs would be forming an “action group”.

It should result “in a lot more infringements” being issued, she says, adding that a “key shift” will be “formalising the role of police”.

She says in a recent example, Health NZ worked with police to seize 99,000 cigarettes in Rotorua and the wider Waikato.

Costello says she has also asked health officials to work on tougher penalties and a regulatory regime that would control who could import, store and sell tobacco products.

In the meantime, she says, smokers should understand where their money may ultimately end up and the harm it could cause.

'This isn't just about a cheap packet of cigarettes.'

During six weeks of surveillance, investigators recorded what they described as a 'notable event' on Kyle Rd in Greenhithe.

BP's van waited in a dead-end street with 'extremely limited sightlines' before a black BMW X5 arrived and parked behind it.

An unidentified man exited the BMW and opened the rear door of the van.

'Surveillance did not establish what, if anything, was transferred but the meeting was clearly deliberate and discreet,' investigators say.

For Costello, the wider illicit tobacco trade carries consequences well beyond the local retail counter.

'The money from buying these cigarettes goes to gangs overseas and funds violence, intimidation, and more crime.'