The Government has agreed in principle to stub out the brightly-coloured branding of cigarette packets - just as tobacco companies' court actions to overturn Australia's plain-packet law are getting under way.
Forcing tobacco into plain packaging is considered a key policy to help break the cycle of
new, teenaged smokers becoming addicted.
Unbranded packets have been shown in New Zealand research with young people to lack the cool factor associated with cigarette branding for decades.
Australia's new law will put tobacco into packets of a dull colour dominated by large health warnings and with standardised fonts for the names of the products.
New Zealand's Associate Health Minister Tariana Turia said tonight that cabinet had agreed in principle to introduce a plain packaging regime in alignment with Australia, subject to the outcome of a New Zealand public consultation process to be carried out later this year.
"The public consultation process is a transparent way of reviewing the evidence and testing the case for plain packaging, and giving the public, the health sector and business interests a chance to have their say.''
Final decisions would be made after the consultation results had been taken into account.
"I am confident that we can bring in a plain packaging regime that will meet all our international commitments, including a major global treaty on tobacco control as well as a range of multilateral, regional and bilateral trade and investment agreements.''
Professor Jane Kelsey, an Auckland University expert on international trade and investment law, said Australia was facing several challenges on its precedent-setting plain-packaging law, which showed that tobacco companies would use every legal manouevre they could find.
"We can expect that similar pressure will be brought to bear on the New Zealand Government.
"But the New Zealand Government also has obligations under the Framework Convention on Tobacco Control to pursue these kinds of policies. It has made a commitment ... to pursue a goal of Aotearoa-New Zealand being effectively smokefree by 2025. You can't achieve that goal without radical tobacco control policies.''
She said one of the tobacco company actions against Australia was under a bilateral investment agreement with Hong Kong, claiming a loss of intellectual property rights though the change to plain packaging.
New Zealand's agreement with Hong Kong contained strong public health exception clauses, but its agreement with Singapore did not.
"It contains other kinds of exceptions.''
Professor Kelsey said New Zealand would become much more vulnerable under Trans-Pacific Partnership Agreement investment provisions, "because that would give United States companies the direct right to challenge us''.
Tobacco company Philip Morris New Zealand said a plain packaging law would violate numerous international laws and trade treaties.
Susan Jones, Head of Corporate and Regulatory Affairs at British American Tobacco, said the company would take "every action necessary" to protect its intellectual property rights "as would any other business faced with the removal of their brands". "A government prohibition on a company's right to use their own intellectual property constitutes property removal and sets a disturbing precedent for businesses throughout New Zealand.
"If government is prepared to do this today, are the next logical steps to force alcohol, fast food, salty or sugary products into plain packs as well?" said Ms Jones.