A hard-hitting law change to stamp out the tobacco industry's last avenue of marketing is likely to get wide support when it comes to Parliament.

The Smokefree Environments (Tobacco Plain Packaging) Amendment Bill could get its first reading today and is expected to be backed by all parties except New Zealand First and the Act Party.

On the eve of the debate, United States business groups fired a warning shot at the New Zealand Government, urging it to halt the "unwise" legislation because it trampled on company's trademarks.

The Government expected to have to defend its plain packaging regime in court, and Prime Minister John Key said yesterday it would wait until Australia resolved its legal challenges before passing the legislation.


This could mean a significant delay. Experts said a World Trade Organisation (WTO) challenge against Australia by tobacco-producing countries was moving more slowly than usual. Once a WTO hearing panel was decided on, the case could take between 12 and 18 months.

During the consultation process in New Zealand, tobacco-producing countries Nicaragua, Dominican Republic and Indonesia expressed strong opposition to the plain packaging proposal.

Australia is also facing a separate challenge from tobacco company Philip Morris, which claimed its plain packaging laws breached a free-trade treaty with Hong Kong.

Mr Key was asked yesterday about the significance of the Trans-Pacific Partnership (TPP) negotiations, which could include provisions to allow multinational companies such as tobacco firms to take direct legal action against Governments.

He said TPP talks were taking place "in isolation" and would not put a halt to the progress of the legislation.

A group of six American business groups including the US Chamber of Commerce said they were "deeply disturbed" that the Government was going ahead with the proposal.

"This bill, in effect, eliminates the right of a business to use its trademarks in everyday commerce. We respect the right of New Zealand to regulate in the public interest, but this is the wrong approach."

Labour Party trade spokesman Phil Goff told foreign vested interests to "butt out" of the debate.


"As much as apologists for tobacco might pretend this is a debate about intellectual property rights or removing barriers to trade, in fact it's about a Government's sovereign right and responsibility to promote good health and public wellbeing."

Act leader John Banks, on the other hand, said he would oppose the bill. He told the Herald: "No one dislikes smoking more than me". But he was against the state seizing property rights without compensation.

Treasury officials said an investor-state dispute could cost the Government $3 million to $6 million.

Plain packaging moves
Australia: Introduced plain packets 2012
New Zealand: Introduced legislation 2013
England, Ireland, Norway, Canada, Turkey: Considering plain packaging