Tobacco dominates dairy revenue

A lot is being said about violent robberies of dairies. Tobacco is often the target of thieves, and suggestions have been made that dairies should stop stocking tobacco to protect themselves.

An Associate Minister of Health has said dairy owners should stop selling cigarettes, and the ‘higher security’ of liquor stores means they may be more appropriate outlets.

RNZ: Dairy owners blame cigarette price hikes for robberies

Dairy owners should stop selling cigarettes “if they feel too threatened” by robbers, says Associate Health Minister Nicky Wagner.

A packet of 20 cigarettes will cost about $32 by 2020, after four legislated 10 percent year-on-year price rises.

Dairy owners say the price hikes are making cigarettes more and more enticing for thieves.

Ms Wagner said cigarette sales might be more appropriate for liquor outlets.

“Maybe we should sell them with alcohol because the security systems in an alcohol convenience store is usually much higher than [in] a dairy,” she said.

There’ a major problem with these suggestions. A large chunk of dairy revenue is from tobacco products. Many dairies would be not be viable businesses without tobacco which can represent towards a half of their revenue.

And there are other complications too, as reported by the ODT: Liquor licence in doubt

A Dunedin supermarket  with a perfect record selling alcohol faces losing its liquor licence over the amount of tobacco products it sells.

A report  on the licence application by Brockville Four Square Supermarket said the police, public and Medical Officer of Health did not oppose the liquor licence, and there were no issues about the suitability of the applicants Greg and Zandra Davis.

The problem was a breakdown of the shop’s sales revenue showed the principal income  of the business  came  from the sale of tobacco.

Foodstuffs, which owns the Four Square chain, said tobacco was increasingly becoming shops’ main  revenue stream,  as prices rose each year because of government tax hikes.

Dunedin City Council liquor licensing inspector Tony Mole said in his report  39.50% of the shop’s  revenue was  from  tobacco products, while food products made up 28.64% of  income. According to  the Sale and Supply of Alcohol Regulations Act 2013,  the  shop’s high tobacco income meant it had to be considered its  “principal business”.

I’ve seen claims from elsewhere that suggest tobacco is the principal business of many dairies – this supermarket is in a similar situation to a dairy.

“Under this interpretation of the Act and the regulations, we would conclude that Brockville Four Square cannot be considered a grocery store for the purposes of licensing,” Mr Mole said.

The shop  did not appear to meet the requirements  for a different off-licence application, documents showed.

This is not the only supermarket with this problem.

Cockle Bay Four Square, in Auckland, also had its liquor licence renewal application declined last year on the basis it  sold too much tobacco to be considered a grocery shop.

This is a complex issue.

Security of supermarkets and dairies may need to be increased substantially if they want to safely sell tobacco.

The price of tobacco, pushed up by regularly increasing tax, has in large part created this problem, but it is also a law and order issue. It seems to be getting so bad that the police may need to put more resources into rapid responses to diary robberies – and liquor stores also have high robbery rates in some areas, so they aren’t necessarily the solution.

Leave a comment

21 Comments

  1. NOEL

     /  13th May 2017

    ncreasing tobacco excise is likely to increase incentives for trade in illicit tobacco products. However, New Zealand’s geographic isolation, border control systems and climate mean the risks of large-scale smuggling and illicit domestic manufacturing are relatively low. Nevertheless, there may be increased security risks for tobacco retailers due to an increase in the attractiveness of tobacco products to criminals.”

    2016 Treasury Report.

    Reply
  2. David

     /  13th May 2017

    Sale of Liquor act probably needs updating and should reflect profit not revenue from tobacco product.
    Nanny National needs to stop meddling as well with their bloody government knows best attitude.

    Reply
  3. Ahhh so that portion of sales from Tobacco versus overall sales – does it include the excise tax? If so then its a BS calculation. The business should be allow to exclude the excise tax as its an artificial distortion. I am pretty sure the sales revenue number used doesn’t include GST

    But on a different tack – David above is correct the Sale of Liquor Act needs updating. Not just on the profit angle he mentions but also to get Police to pull their heads in over their bullying tactics around Liquor licence applications….

    Reply
  4. And another thought…

    We are seeing the effects of an pseudo-prohibition via the excise tax now: Armed hold ups, thriving black market baccy sales.

    Tighten the noose further and tobacco will become just like other illicit drugs: a cash cow for organised criminals, mostly respectable low profile “businessmen”, and their strong arm enforcers the various gangs that infest NZ…

    Reply
    • Kevin

       /  13th May 2017

      Yep. This is what happens when you prohibit something, even if it’s virtual prohibition. And if dairies stop selling tobacco then smokers will get their fix elsewhere – like on the black market where it is uncontrolled, unregulated, and a lot more dangerous.

      Reply
  5. Oliver

     /  13th May 2017

    These Indians have been selling harmful tobacco and alcohol in this country for many years now. In ethically a and amorally. I think it’s poetic justice that the harm is now being passed on to them. Just stop selling the awful stuff. And get arm yourself with a gun.

    Reply
    • This comment is racist, it’s ignoring how long alcohol and tobacco have been used in New Zealand, it approves of violent crime, and suggests more violence as a solution.

      Reply
      • The old Oliver rears his ugly head again … Is that TOP policy your spouting son?

        There was a time, Oliver, after WW2, when dairies were the ‘entry level’ business for immigrants from Mother England … amongst others … [a Maori family near where I grew up] … and back then dairies sold a shitload more tobacco as well, except the price wasn’t artificially high due to excise tax …

        If that were still the case today, would tobacco harm be the POMs fault …?

        Apologies folks … I know … I shouldn’t give him oxygen …

        Reply
  6. Aotearoa NZ should pull out of this ban tobacco crap, since it’s now clearly creating more problems, expense and harm than its saving, and the evidence also shows a proportion of the population are simply never going to give up smoking regardless of how high the price of fags goes.

    Eventual ‘prohibition’ – as dave1924 correctly comments – will result in a new black market. Maori, who are proportionately more smokers, will once again be proportionately more criminals … CYO … Create Your Own …

    Instead we should rationalise all our ‘substance & drug’ policies & laws, including ‘harm’ caused by alcohol and tobacco, cannabis and ‘Class’ drugs, in a comprehensive, evidence-based, widespread, rapid and impartial investigation/consultation process. This process should take into account the ethics of ‘freedom & responsibility’ … and be regularly monitored and reviewed …

    It should include evaluation of legislation that actually creates crime [out of nothing at all] – like tobacco excise and cannabis laws – and squanders Police resources. Excise based on ‘harm’ and cost to society – a form of communal harm – should be imposed on every one of these substances that does identifiable harm. Once the level of excise meets the cost of dealing with the harm, the excise should be fixed there, and regularly reviewed.

    Concurrently, public awareness, cessation programs and alternatives like vaping can be promoted or, one might say, can be given the same ‘freedom & responsibility’ …

    Yet another ‘issue’ that points to the grave disconnect between common sense and natural ethics on the one hand, and politics and (so-called) democracy on the other …

    Reply
    • Kevin

       /  13th May 2017

      Based on data from the NZ drug harm index, if illicit drugs were decriminalised it would save the country up to $270 million dollars a year. To put this in perspective, the government could pay every cannabis user a thousand dollars and still be paying less than what prohibition cost.

      Reply
  7. Patzcuaro

     /  13th May 2017

    Under current work safety laws businesses are required to provide a safe working environment. They must identify hazards, in this case armed robbery, and then take steps to mitigate the hazard.

    Reply
    • Is there a punch-line to that joke Patzcuaro?

      I realise you’re probably not joking but here’s the nefarious, malignant, paradoxical absurdity of neoliberalism’s total focus on the individual …

      The elected government creates a mass, nationwide problem – literally manufacturers a crime – resulting in dairies becoming unsafe workplaces, and then the individual dairy owner must identify and take steps to mitigate the hazard …

      Well … at least identifying the hazard shouldn’t be too difficult …!?

      Reply
  8. Corky

     /  13th May 2017

    There’s nothing here a diary owner with a Glock couldn’t solve. I would love to see News at Six open with a dead robber lying outside a diary, with the owner safe inside…and safe from prosecution,

    Reply
    • … and the next News at Six opens with a dairy owner who has shot and killed someone they have an age-old grudge against, they simply don’t like or think has designs on their wife, or they think MIGHT rob their dairy …

      Nex’ minute … people are shooting each other willy-nilly for whatever reason they want … safe from prosecution …

      Reply
      • Corky

         /  13th May 2017

        You certainly live in your own head. Trust me, the real world is different. Although your comments have given me a great idea for a sitcom….’Kumars Glock.’

        Reply
        • You’d be the first person to say, “Give a Maori or a Muslim or an immigrant half-a-chance, or set a precedent, and they’ll exploit it for all its worth”

          That’s exactly what will happen if ANYONE who takes another human being’s life is NOT served with the due process of law.

          In the event of self-defence being proven, the person is acquitted …

          Even if they’re convicted on the technicality that YES, they did take a life, or they did use excessive force – e.g. a Glock vs threats or [perhaps] a bat or knife – the Judge might decide on dismissal or an extremely lenient sentence …

          I wouldn’t trust you personally in the alternate reality you’re proposing … the one you’re living inside YOUR head …

          Reply
          • Gezza

             /  13th May 2017

            Some might dispute that. Out of his mind implies not living in his head.

            Reply
  9. If the government would stop tobacco increases you wouldn’t be having these violent robberies & desperate people will start buying on the black market. How about increasing the taxes on alcohol, that is what is killing younger people and people in general and that is a fact!!!

    Reply

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