Claims by an international tobacco giant that plain packaging on cigarettes will infringe global trade agreements have been rejected by MPs.
British American Tobacco also told the Health Select Committee the move could even lead to an increase in cigarette sales.
The company told the committee that plain packaging will remove its trademark from the box, infringing world trade agreements.
However, the argument didn't wash with Health Committee head MP Paul Hutchison.
ONE News understands any new packaging would allow for a discreet brand name and trademark.
British American Tobacco also say the plan by the Government to introduce plain packaging will do nothing to stub out smoking.
"This legislation will not achieve the public health objectives," says British American Tobacco general manager Steve Rush.
"It will not reduce tobacco consumption."
Jump in sales
The company claims plain packs have been good for their business in Australia, with convenience store owners reporting an increase in sales since plain packaging was introduced more than a year ago.
"The previous declines in industry volumes has halted," says Mr Rush.
The claim has been contested by the anti-smoking lobby.
"Plain packaging is not a magic bullet but it will contribute to reducing cigarette smoking in New Zealand," says Ash's Stephanie Erick.
British Tobacco is proposing an alternative plan including increasing the tax on cigarettes, education programmes and regulation of the e-cigarette industry.
National, Labour and the Greens support the move to plain package cigarettes.
A further public hearing will take place next week, while the Select Committee are due to report back to Parliament in August.