The cost of a packet of cigarettes could plummet by half if plans to adopt plain standardised packaging are implemented, one of the world’s largest tobacco companies has warned.

Speaking at the launch of a multi-million dollar campaign against the Australian government’s plans to implement plain tobacco packaging by January 2012, British American Tobacco Australia (BATA) chief executive David Crow said a price war between manufacturers and the illicit trade, which was likely to boom as a result, could lead to an increase in smoking.

“Plain packaging ultimately means that price could become the most obvious distinguishing factor between brands,” Crow said. “Competition could drive down prices, and consumption levels could increase as smokers switch to cheaper cigarettes.” BATA has also vowed to “defend the intellectual property” of its packaging by taking legal action against the government’s plans, a move which it also claims could end up costing Australian taxpayers billions of dollars.

Responding, Australian health minister Nicola Roxon said she was “prepared for a fight”.

Last month, Australia unveiled plans to sell tobacco products in standardised olive-green packs with large pictorial health warnings and no brand imagery.

Retailers say the move would create delays in service times and inconvenience shoppers as staff struggle to locate brands.

Managing stock would also be more difficult, according to the Australian Retailers Alliance.

The UK government is due to consult on plans to adopt plain packaging later this year.

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