Julian Wood
Cigarettes, while not worth their weight in gold, are now worth one-and-half times their weight in silver, as successive governments have increased the taxes on cigarettes.
As economists predicted, this has meant that smoking rates in most groups have stalled or started to drop, a sign that the tax is working towards the desired public health goals.
Unfortunately, it has also become clear that these price rises are having some unintended, violent, flow-on effects, as corner dairy owners find themselves stocking product of similar value to some jewellery stores.
High Price sticks
One kilo of cigarettes (30-40 packets) now costs around $1200 to buy depending on the brand you use. On the other hand, one kilogram of silver at spot prices will cost you roughly $800 dollars to buy.
Cigarettes, like precious metals, are a good stand-in for currency.
They are a semi-permanent store of recognisable value (they keep well, until smoked), they are easily transportable, and in some markets, they are easily exchangeable for other goods or services.
Evidence on smoke
Unlike other stolen goods, they are very hard to trace, with no VIN markings, registration details, or GPS identities. Ultimately, once on-sold, the evidence will literally go up in smoke.
Which brings us back to dairy owners, and their current plight. While jewellery stores and banks have been storing and trading valuable objects for centuries, our tax war on tobacco has put dairy owners in the unenviable position of stocking many thousands of dollars’ worth of semi-precious product.
Security mismatch
For many shop owners, the speed of this price creep has left a serious security mismatch between the product being sold and the amount of security afforded to that product. It is hard to imagine a jewellery store open late at night in the middle of a quiet neighbourhood with one or two staff, or a currency exchange agent operating with just a shop counter between their customers and vast stores of cash behind them. Yet dairy owners are now in this situation.
Almost every week, we see stories of shop burglaries. Store owners are scared and they have a right to be, nobody should live in fear of being beaten or robbed.
However, it does not follow that society should have to bear the costs involved in making every dairy as secure as a bank.
Government Fund
Currently the government has a $1.8 million fund to assist dairy owners battling aggravated robberies by installing fog cannons, panic alarms, time safes and DNA spray in a fifty-fifty co-funding arrangement.
While any decent society must work to provide security and peace of mind for all its members, I think we must also acknowledge that not all products in a dairy are equal.
Cigarettes are now a high end, high risk product that require stockists to invest in suitably high security measures.
If dairy owners are not able to afford security equivalent to the value of their product in a similar manner to supermarkets and petrol stations, then perhaps they need to go cold turkey on the cigarette business altogether.
Julian Wood is a Researcher at Maxim Institute based in Auckland.
