The Government has admitted plans to introduce plain cigarette packs may not go ahead if tobacco companies are successful in challenging the move across the Tasman.
Associate Health Minister Tariana Turia confirmed legislation to implement plain packaging for cigarette packets and pouches will be introduced into Parliament by the end of the year. The legislation will see branding and marketing imagery replaced with generic wording and graphic health warnings.
However, the Prime Minister has now admitted the plans will not go ahead if tobacco companies are successful in challenging the Australian Government.
"Plain packaging is another important step. If we can take it we will but ultimately if we can't, we won't," said John Key.
In December last year, the Australian government began the introduction of plain packaging, with cigarettes now sold in olive green packets with large health warnings.
Tobacco companies British American Tobacco and Imperial Tobacco have challenged the Australian Government as they claim plain packaging is unconstitutional because it effectively extinguishes their intellectual property.
The Australian Government won a court battle but a challenge is currently before the World Trade Organisation. The result of that challenge will determine whether New Zealand can continue with plain packaging.
"What any tobacco company would be claiming is that its intellectual property rights have been expropriated or damaged in some way and that ought to amount in a significant claim for damages," said Chapman Tripp commercial lawyer Daniel Kalderimis.
Associate Health Minister Tariana Turia said the Government understands legal action is a possibility. She said legal action could cost tax payers $3-6 million for only the initial proceedings.
"The Government acknowledges that it will need to manage some legal risks. As we have seen in Australia, there is a possibility of legal proceedings," said Turia.
"To manage this, Cabinet has decided that the Government will wait and see what happens with Australia's legal cases, making it a possibility that if necessary, enactment of New Zealand legislation could be delayed pending those outcomes."
Turia said a decision will be made in Australia in the next 15-18 months.
Tobacco companies react
Tobacco giant Philip Morris has hinted legal action is likely if the Government proceeds with plain packaging legislation.
"There is no credible evidence that plain packaging will lower smoking rates, but strong evidence it breaches international trade rules and exposes New Zealand to WTO action," the company said in a statement to ONE News.
Imperial Tobacco New Zealand also said they were disappointed with the Government's decision.
"Plain packaging breaches international trade agreements that affect New Zealand and the Government has acknowledged that there is a risk that New Zealand could be exposed to WTO action," said company's head of commercial, Brendan Walker.
Turia said the Government understands they could face similar legal action but they had the "resources" to challenge tobacco companies.
Labour Party leader David Shearer said he supported plain packaging but believes the tobacco industry should be given notice of the changes.
"We would want to forewarn what was going to happen but I believe it should probably be quite quick and it should go ahead straight-forwardly," Shearer said.
The Government has been consulting on the Smoke-free Environments Bill since last year, which had more than 20,000 submissions during the consulting process.
Associate Health Minister Tariana Turia has previously said that it is time tobacco was removed from New Zealand shelves, due to 5000 people dying a year from smoking-related illnesses.
"I've come in to this position knowing that it's our families - Maori families - who are the most likely to be affected by this - 13 people dying a day, 5000 people dying a year," she said.
Plain packaging welcomed
The move to introduce plain packaging has been welcomed by the Maori Party and health advocacy groups.
Maori Party co-leader Pita Sharples said the decision showed the Government is putting the health of New Zealanders before the profits of tobacco companies.
"We are extremely heartened by the announcement that plain packaging of tobacco products will be implemented here in Aotearoa," said Sharples.
"Plain packaging, alongside other moves towards tobacco control will save lives, and that is what it's all about."
The Cancer Society and Heart Foundation have also commended the Government.
Cancer Society tobacco control advisor Skye Kimura said the move was another milestone in the journey to New Zealand being smoke-free by 2025.
"The announcement is long-awaited by all tobacco control groups and something the Cancer Society has been campaigning for, for a long time," said Kimura.
"This is a major step. No longer will tobacco products be decorated with desirable colours and prominent branding - future plain packaging, with large graphic warnings, will depict the reality instead."
- with Fairfax