An international ruling will be hugely important to New Zealand's plans to require cigarettes to be sold in plain packs, ministers say.

According to a draft ruling, the World Trade Organisation (WTO) has upheld Australia's plain packaging laws against a challenge by tobacco-producing countries, which had claimed the laws were a barrier to trade.

A WTO ruling in Australia's favour was expected to give other countries the green light to introduce their own laws, and could also pave the way for plain packaging of other products like alcohol or junk food on public health grounds.

New Zealand is a third party in the WTO case, and presented evidence before an expert panel in Geneva.


Trade Minister Todd McClay said New Zealand had a keen interest in the eventual ruling because its own plain packaging laws would come into force in March - five years after they were first proposed.

"All of the advice I have received says that the Government is in the right space, that it's for the Parliament to set public health policy. Our strong view is that WTO rules back that up.

"When we negotiate free trade agreements ... we always reserve the right for the Government to pass legitimate rules and laws and public health is an important part of that."

If the WTO ruled in Australia's favour, New Zealand could be confident that its laws would not attract a similar challenge, McClay said. That would have been a costly exercise - Cabinet documents show a WTO challenge would have cost taxpayers up to $2 million.

Asked about the case's significance for other products considered a risk to public health, McClay said: "I don't necessarily think it has any flow-on effect in any areas of public health policy. My view is that we have had the ability to be self-determining in those areas."

Once the law comes into effect, cigarettes and other tobacco products will have to be sold in standardised colours and fonts, and with large health warnings.

Associate Health Minister Nicky Wagner said the WTO decision was important because product design and packaging were major avenues for marketing cigarettes.

"Plain packaging will reduce the appeal of tobacco products and the desirability of smoking," she said.

"This move shows we are serious about stubbing out smoking and deterring new smokers, especially young people."

British American Tobacco New Zealand declined to comment on the WTO case, saying it would be inappropriate given the final report had not been released.

The plain packaging regime was first proposed in New Zealand in 2013 and was driven by the Maori Party.