Plain packaging of tobacco products could be the inevitable next step to stopping people smoking, but the National Party is only lukewarm on the idea.
The Government on Monday released a consultation document proposing to stop tobacco companies using the design and appearance of packaging to promote their products.
It's seeking the views of the public, along with businesses and organisations, along with New Zealand's trade partners.
Prime Minister John Key says the idea is "very worthy of consideration", but his party is yet to decide whether to support a law change.
"There are lots of things we need to consider. I wouldn't say it's a slam-dunk by any chance that plain packaging will take place, but nor would I rule it out."
Australia has announced it will introduce plain packaging from December.
However, that move could be undermined by pending legal action from tobacco giant Phillip Morris Asia, under a trade treaty with Hong Kong, while Honduras, Ukraine and the Dominican Republic have taken a case to the World Trade Organisation, claiming the legislation breaches Australia's commitment under global trade rules.
Mr Key says it's not yet clear whether New Zealand would be subject to similar action.
"We're likely to have the capacity to be able to introduce plain packaging in New Zealand but we're continuing to seek advice in that area."
The cost of defending a court case over such legislation could reportedly cost taxpayers up to $6 million - plus compensation if the Government were to lose - and Mr Key says that's another factor that needs to be taken into account.
British American Tobacco New Zealand on Monday warned that plain packaging could backfire on the Government by diminishing intellectual property rights, make tobacco more affordable through increased price competition and grow the illegal tobacco market.
Company spokesman Nick Booth said the company was strongly opposed to removing branding, which it calls "our valuable property".
The consultation document's release follows a ban on the display of tobacco products which came into effect on Monday.
NZN