The Ministry of Health has put out a consultation paper on plain packaging and expects to report back on the findings on October. The Government has agreed to support the policy change in principle.
BATNZ's general manager, Steve Rush, said plain packaging created a "disturbing precedent" for other industries, adding that the British Government was considering a similar proposal for alcohol.
He said New Zealand should not "blindly follow Australia's lead" with policy he said was unproven in helping to curb smoking.
Asked about BATNZ's allegation that there was no proof plain packaging would reduce harm from smoking, Mr Ryall said: "There is no evidence specifically, but there is plenty of evidence that packaging works. And if it didn't work, then why are they complaining?"
The expensive campaign foreshadows the likely legal battle between the Government and "big tobacco" if plain packaging is introduced.
The Australian Government is being sued by tobacco companies and tobacco-producing countries for its plain-packaging regime. Mr Ryall said if New Zealand faced similar legal challenges, the result would be "very one-way".
Associate Health Minister Tariana Turia said New Zealand remained committed to plain packaging despite huge pressure from tobacco companies and the threat of legal challenges.
"We're interested in the health and well-being of families and we're here to support the families who lose 13 people a day here in New Zealand. That's a good enough reason to continue our campaign."