A large tobacco company is threatening legal action against the NZ government over its plan to forge ahead with plain tobacco packaging laws.
British American Tobacco has confirmed to ONE News that it will explore "all possible legal avenues" to fight the legislation, which will be debated later this year after a delay due to legal action against Australia's government by another tobacco company.
However, Prime Minister John Key says he is not worried about the impending legal fight.
The case against Australia, brought by Philip Morris, failed, but there is still a World Trade Organisation case pending.
Both British American Tobacco and Philip Morris say forcing them to adopt plain packaging on their products breaches copyright.
ONE News also understands that the government is waiting for the Trans Pacific Partnership Agreement to be ratified, because it contains a clause that allows the government to make any changes to public health law it pleases without fear of reprisals like this.
Neither of the companies would comment on the issue, but they claim there is no evidence plain packaging reduces smoking rates, and say the government should be cracking down on home-grown tobacco instead.
The government is working towards the goal of New Zealand being smokefree by 2025.