The tobacco farmer and the law

May 15, 2010
Another raid on a Motueka tobacco grower has thrust speculation about a tobacco black market back into the headlines. Geoff Collett reports.
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IT IS easy enough to find evidence of the lingering presence of tobacco growing in Motueka - it's standing there in clear view of passing traffic on the Motueka Valley Highway, the remnants of Laurie Jury's latest crop.
If, as recent events imply, the row of distinctive, tall, large-leafed plants represents a key to the black- market tobacco trade, it is a remarkably blatant one. Not that Mr Jury accepts for a second there is anything illicit about what he's doing.
To him, his continued high-profile involvement in tobacco growing, as probably the last self-acknowledged commercial grower in the country, is nothing more than a small farmer growing a small crop of a plant he knows well and sees an opening in the market for.
The small fact that his determination to stick with tobacco has seen him fall foul of the authorities twice now in five years, the second time involving a raid by armed police on his Pangatotara home last week, only hardens his resolve.
The Customs officers who arrived at his place in the wake of the Armed Offenders Squad came with a search warrant that suggested Mr Jury was a suspect in a range of offences, including helping defraud Customs of revenue.
They took all the leaf he had stored in his shed - he won't say how much, but one report said it was about two tonnes - and a bunch of other stuff, including $4000 in cash, but he is confident they didn't take anything that is going to land him a conviction.
The last time they tried, as he likes to point out, their case all but collapsed and they had to return the tobacco they had seized.
His argument is that there is no law against growing tobacco and, as far as he has always understood it, nothing in the law to stop him from selling the raw, dried leaf.
So that is what he does, as he freely admits. Buyers, he says, range from passers-by in camper vans who have seen his roadside crop and want some leaves as a "souvenir", to customers in the North Island.
He has sold as much as 50kg to some. He says all of his customers tell him that they are cutting it for their own use.
The appeal, obviously, is the cheaper price. Even if the leaf has to be processed for smoking, it is still cheaper than buying commercially prepared tobacco, about 70 per cent of the cost of which goes to the government.
What clearly is illegal is to manufacture tobacco, as in processing it into a state for smoking - for example, pressing it into a block and then cutting it into the fine shavings that can be rolled into a cigarette. Manufacturing, except for home- grown tobacco for personal use, requires a licence and the full knowledge of Customs, so that it can collect the stiff excise that applies to tobacco.
If it looks like his customers are evading excise, Mr Jury's argument is that once he has sold it, his responsibilities end. It is over to the buyer as to whether what they do with it is legal.
"They've told me that they want it for their own use. The responsiblity shouldn't come back to me."
Mr Jury started to grow tobacco in the 1980s, as part of the vibrant but slowly dying Motueka-based industry which provided leaf for the cigarettes of Rothmans, until the company pulled the pin on Kiwi tobacco in 1995.
Like most of the other suddenly redundant growers, he turned his hand to various other crops and ventures on his small farm, but about 2002 decided there was nothing to prevent him from getting back into tobacco, never mind that there was theoretically no local market for the stuff.
As it happened, he came across a small-scale manufacturer in Christchurch who was interested in his leaf, for a new budget line of roll- your-own tobacco.
That never worked out and Mr Jury subsequently decided to sell the raw, dried leaf to acquaintances.
Customs, meanwhile, had been conducting occasional operations against suspected black-market manufacturers almost since the demise of the formal, regulated industry in 1995.
Mr Jury's first taste of the service's attentions came in 2005, when it showed up at his farm, seized 3.8 tonnes of leaf and charged him with working with another grower from the Motueka Valley to run an illegal manufacturing business.
The case against him largely fell over. The connection was never proved. Mr Jury accepted a deal to plead guilty on a lesser charge, manufacturing tobacco on unlicensed premises, and paid a small fine, while Customs was ordered to give back the leaf it had seized from him.
That is an extremely abbreviated version of events that dragged on for two years and cost Mr Jury tens of thousands of dollars in legal bills and leaf that was ruined while in Customs storage. While he says he has moved on from it, it obviously still rankles with him.
The memory of it also meant he wasn't exactly floored by the events of Tuesday last week, which started with being woken before 6am by the sound of his partner, Michelle's, dog, Diesel, barking ferociously at the end of their driveway.
He grabbed a spotlight to investigate, shining it on to the road frontage, where the dog was "nutting off", charging up and down the fenceline.
Mr Jury could see nothing, but seconds later, his phone rang, the voice on the other end advising that the police - armed police - were outside his property to help Customs execute a search warrant, ordering him to turn off the spotlight, get dressed and go outside with his hands up.
As he describes what happened over the next few minutes, it is clear the police weren't mucking around. Armed Offenders Squad officers had stationed themselves along the road, on his property and on the stopbank across the highway. He says he counted at least 10 blue laser sights on rifles being pointed in his direction.
He was shouted at, ordered down to the road frontage to be greeted by snarling police dogs, handcuffed and loaded into a car.
His partner was ordered from the house too. Her daughter and the daughter's seven- year-old son were roused and ordered out of a bach on the property where they were sleeping.
The couple were driven a short distance up the road to the place the police operation had been launched from, and where an ambulance was parked among the mass of police cars and vans. The sight of that, Mr Jury says, made him remark to Michelle that the police really must have been ready to shoot him.
Then they waited while the police searched his house, presumably for booby traps, to make sure it was safe for Customs.
If it sounds over the top, Customs has said that armed police were there because of "perceived risk".
Mr Jury maintains there is nothing in the way he behaves to warrant it, although he does have convictions for two minor firearms offences.
One was having an unlicensed .22 rifle on the property which was seized during the 2005 raid; and, years before that, he was given a suspended sentence after discharging a shotgun to frighten off a petrol thief who had been stealing from his farm. In last week's raid, the police confiscated a BB gun owned by Michelle.
He says he is still unsure about what was behind the latest action. He hasn't yet been interviewed by Customs - that is scheduled in a couple of weeks - and while he says they asked him plenty of questions during the raid, they wouldn't answer any of his.
Some property was later returned, which Customs decided was of no interest and, he muses, they were at least better mannered this time than what he experienced in 2005.
Customs is not answering media questions about the Jury raid or others that took place at the same time in Nelson and Northland.
His theory is that Customs sees him as an easy target. Rather than going after those who are doing the illegal manufacturing, it is trying to shut down the supply.
But the only supply? Customs won't reveal what it believes.
It says it monitors tobacco growing in the region, but won't say whether it agrees with the suggestion that Mr Jury is the only remaining grower of any scale.
It needs to be said that there has long been an element of the will o' the wisp surrounding stories about a tobacco black-market fuelled from secret plantations tucked away in the Motueka Valley.
Part of that speculation is fed by the tobacco industry itself, which from time to time makes pronouncements about a widespread problem depriving the government of millions in taxes and, ironically enough, threatening the health of people smoking black- market cigarettes, because of the danger of mould and other contaminants in amateurishly prepared leaf.
Market heavyweight British American Tobacco (BAT) recently commissioned a report on the illicit trade, from consultants Ernst & Young.
Called Out of the Shadows and bearing a cover picture of a misty, vaguely sinister forest, it suggested quite startling levels of illegal growing were under way, centred on Motueka, as well as the smuggling of cigarettes from overseas.
While it concluded New Zealand's small size and isolation meant the black market here is nothing like the scale seen in much of the world - Europe, for instance - Ernst & Young calculated that 8 per cent of all roll-your-own tobacco smoked here is illegally grown.
It claimed that somewhere between 66 and 76 tonnes of tobacco was being illegally grown each year, most of it near Motueka; and that as much as 50 to 60 acres (20 to 24 hectares) of tobacco plantations had been detected in the Motueka district "in previous good years".
While the Ernst & Young report is presented by the industry as a thorough and independent assessment of an elusive problem, not everybody is convinced.
Customs itself says, "We have noted the content of the report and regard it as a useful picture and commentary on the state of the illicit trade in tobacco. We cannot and do not, however, confirm the accuracy of all its content."
New Zealand's main anti-smoking lobby group, Ash, is entirely sceptical. Its director, Ben Youdan, believes the tobacco industry likes to whip up fear about the black-market when it is a tiny proportion of the whole.
He questions the methodology and calculations Ernst & Young applied to work out how much illegal, New Zealand-grown tobacco is out there. For instance, it worked on productivity levels that are usually achieved only on large-scale commercial plantations in the ideal growing conditions found in the United States or Africa.
A small-scale New Zealand grower would get only a fraction of that productivity, he says.
To counter the scaremongering it sees, Ash is in the final stages of completing its own research, Mr Youdan says. It doesn't expect to find anything like the scale of problem Ernst & Young did.
It might seem surprising that an anti- smoking group would be so dismissive of concerns about illegal tobacco growing and manufacturing, but Mr Youdan sees the big tobacco companies using it as a red herring, to divert attention from the vast majority of the industry they control.
Nevertheless, he applauds Customs' recent raids.
"I think that's a really important message for Customs to send out, because contrary to that, you're getting this British American Tobacco (BAT) spin that the world's going to end because everyone's going to start buying illicit tobacco and we won't be able to control it.
"We think it's very timely that just as BAT are putting out this [Ernst & Young] report, Customs are showing they're aware of the issue and on top of it, even if it's very small."
Whether the latest raid against Mr Jury will put anything like a dent in that trade is, as yet, anyone's guess. But despite twice now feeling the attention of the Customs Service, twice having his entire stock of the stuff taken away, and finding himself standing at the wrong end of a policeman's gun, Mr Jury promises he is committed to sticking with tobacco.
It's not a case of defiance, he says, simply determination, and a refusal to be cowed.
"I'm not going to let them beat me like that, " he vows, sitting at his kitchen table and reflecting on the incidents that unfolded in his home a week earlier.
"They've picked the wrong man if they think they can bully me."