Imperial Tobacco has been handed an infringement notice after local residents complained about the smell coming from its factory.
The tobacco giant's plant in Lower Hutt has recently been upgraded, but locals say the work hasn't stopped the "sickly odour" from spreading across the town.
The Petone factory has increased its tobacco production and says the smell is a result of steam from blending tobacco leaf and water.
And it claims not everyone dislikes the smell.
However the Greater Wellington Regional Council has received several complaints and has sent enforcement officers to the area to assess whether the residents had cause for concern.
"We understand the odour to be a sweet, sickly odour, so generally the complaints have been about the intensity and the duration of that odour," said Al Cross, from Greater Wellington Regional Council.
"One of our enforcement officers has found the odour to be offensive and objectionable."
The council issued an infringement and abatement notice to Imperial Tobacco.
"There is a considerable difference to what there used to be, but obviously they're burning a lot more and they've got more business to do," said Kevin Lummis from Lummis Joinery.
Local resident Kirsten Mannix said: "I'm guessing it's connected to the increase in capacity, because I've just started noticing it."
After receiving the infringement notice, Imperial Tobacco said it is doing further upgrade work on the factory to reduce the odour in the neighbourhood.
The company said it meets local environmental standards.