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The government has rejected a call to force retailers to hide cigarette displays from the public.
Health Minister Tony Ryall says there is not enough evidence to suggest that such a move would have any impact on smoking levels.
Parliament's Health Select Committee recommended displays behind the counter be covered up, despite also failing to find evidence it would have any positive effect.
"The Health Select Committee made it quite clear in their report that there is no international evidence linking banning tobacco displays with reducing smoking rates," says Ryall.
Ryall says the government is prepared to consider options that will result in a reduction in smoking levels.
He says if international evidence proves that a ban on displays would result in a significant reduction in use of tobacco, the government will reconsider.
The decision is welcome news for the 200 retailers who petitioned against the ban. They claim the ban would have cost them thousands of dollars in refitting their shops so that tobacco products were hidden.
New Zealand Medical Association supported the ban saying that current legislation sends children a message cigarettes are an everyday item.
Dr Peter Foley from the Medical Association says stopping the tobacco industry advertising products discourages young people from starting.
Foley says smoking is an addictive poison, that kills half of all long-term users.
Anti-smoking lobby group ASH also supports the ban.
"We've also got very good evidence from New Zealand itself that these retail displays have a real impact on encouraging young people to start smoking, so it's also important to remember that it's about stopping kids from starting smoking as well," says Ben Youdan of ASH
Despite the rejection, the government says its still committed to reducing smoking rates.
"Those people that have made a decision that it's time to give up we want to help them do that and we've got a number of initiatives that we'll be announcing in the not too distant future to do that," says Ryall.
