Cigarettes – sales, security and smokers

Smoking may be on the decline but smokers still make up one fifth of the adult population. While the latest research suggests fewer young people are taking up smoking, sales of tobacco products remain a vital portion of a service station’s business.

In 2014, tobacco sales made up 45 percent of convenience store sales – worth $445m to the sector. Tobacco product sales are double those of beverages.

As a result of changes to the Smokefree Environment’s Act in 2012, tobacco products were removed from public sight. This has slowed down customer service however the latest research from Otago University suggests the move is linked to a drop in 15-17 year olds taking up smoking.

New Zealand Association of Convenience Stores Chairman Roger Bull says, partly due to the steadily rising cost of cigarettes and loose tobacco, these products are now routinely targeted in brazen in-store robberies.

Last year’s 2015 MTA Service Station Industry Survey, showed around 1 in 5 service stations who responded had been burgled and a similar number experienced staff theft. Cigarettes and tobacco are the most common target and in half the incidents where tobacco was stolen, cash was also taken.
service station graph

“Service stations have increased security measures over the years, not necessarily as a result of the increased value of the tobacco stock – but ongoing price increases haven’t helped,” he said.

So apart from grills, alarms and locks, some service stations are now turning to the fog cannon.

One was installed in a Mobil service station in East Tamaki Road, Auckland recently. The device can be connected to the alarm system or activated by an emergency button.

When it is set off it fills a room with dense fog in a matter of seconds.

“It proved its worth when offenders attempted a ‘smash and grab’ at 3.10am in December last year. The clearly frightened attendant activated the fog cannon which forced the offenders to run away,” he said.

The Government intends to continue to increase the tax on tobacco products as part of its carrot and stick approach to reduce smoking rates.

Roger Bull warns that this, and the shift to plain packaging, may lead to an increase in smuggling and black market sales.

“A recent KPMG report into the illicit trade in Australia reported that the black market of illicit cigarettes has increased from 13.5 per cent of the total market in 2013, to 14.5 per cent in 2014.” He believes New Zealand could also be targeted by black-marketers if there is a move to plain packaging.

“It’s much easier to package up cigarettes in Thailand or China into a plain packet than it is to counterfeit a major brand.”

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