A bill that will force cigarettes to be sold in plain packages is heading for its first reading in parliament, but the government won't take it any further until a legal challenge in Australia has been settled.
Tobacco companies claim the ban is illegal and they're backed by powerful trade organisations including the US Association of Manufacturers, the National Foreign Trade Council and the US Chamber of Commerce.
They say they're "deeply disturbed" by the government's decision to go ahead with the legislation because it eliminates the use of trademarks.
"It will violate New Zealand's international trade obligations while facilitating illicit trade and counterfeiting," they said in a joint statement on Monday.
"We respect the right of New Zealand to regulate in the public interest, but this is the wrong approach."
Associate Health Minister Tariana Turia, who is in charge of the bill that is due to go for its first reading on Tuesday, doesn't believe it breaks any World Trade Organisation rules.
Prime Minister John Key doesn't want to take a chance on that, and said in December fighting a legal challenge from companies like British American Tobacco New Zealand would be too expensive for the government to contemplate.
The action mounted by the tobacco companies against the Australian government - the first in the world to legislate for plain packaging - involves complex international trade rules and is expected to be a long-running dispute.
Mr Key says if the Australian government wins, the Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill will be passed as quickly as possible.
