Australia's largest tobacco franchise could be in breach of state tobacco laws by giving away free cardboard covers designed to cover the graphic imagery on plain cigarette packs.
The Tobacco Station Group, with more than 300 stores nationally, is offering covers which feature the company's logo and website address free of charge to customers who purchase tobacco products in their outlets.
The federal Department of Health and Ageing is launching an investigation to see if the products breach federal tobacco laws and has advised its state and territory counterparts to do the same.
Under NSW's Public Health (Tobacco) Act 2008, tobacco retailers are not permitted to provide gifts or other benefits to people who buy tobacco or non-tobacco smoking products.
"State and territories have enacted legislation prohibiting promotional schemes for tobacco products, that is, offering gifts, prizes . . . in association with the sale of tobacco products. It is therefore a matter for consideration by states and territories," a spokeswoman for the federal department said.
The Tobacco Station Group has confirmed the covers are available at all TSG outlets and were designed to "enable customers to express their identity with their cigarette packs".
"TSG are of the opinion that the cases comply with the new Australian plain packaging legislation," a spokeswoman said.
It is not the first time the federal government has investigated a product designed to hide the shocking, graphic health warnings on plain packs, which are three times larger than the previous images.
In December, a Gold Coast sticker manufacturing company launched a range of custom stickers that wrap around cigarette packs. The Box Wrap stickers with the marketing slogan, "It's your box, it's your choice," feature a range of images including the Australian flag and scantily-clad men and women.
In this instance, the department found the company was not in breach of federal tobacco laws.
Under the legislation, tobacco companies are prohibited from selling cigarette packs with slips or covers that hide the plain packs and promote smoking or tobacco products. However, it is not an offence for a company to sell a cover or case if it is sold separately to the cigarette pack and not applied at the time of supply and does not contain any tobacco product branding or advertisements.
The Australian Medical Association's president, Steve Hambleton, has condemned TSG's decision to offer free cigarette covers and said he would support any move by the government to prohibit any company from trying to diminish the effectiveness of plain packs.
"This is a tobacco group virtually saying 'we think this (plain packaging) is going to work so we are going to go out and try and defeat it'," he said. "I would not underestimate the government's resolve to make sure this kind of thing is outlawed."
Federal Health Minister Tanya Plibersek said the emergence of such products demonstrates the effectiveness of the plain packaging laws, which came into effect on December 1.
"People who make a living selling tobacco are aware just how powerful plain packaging and graphic health warnings are at turning smokers off," she said. "We will continue to watch closely and make sure no laws are broken."
At a press conference on Thursday, Ms Plibersek said the government would "use every legal means to prevent" industry members who try to circumvent plain packaging legislation.
She said the government had so far received 15 complaints about retailers, mostly small shopkeepers, who had been flouting the regulations.
"The Department of Health and Ageing is investigating the complaints and has found some to be unsubstantiated. Where evidence suggested non-compliance, warnings were issued and educational material about the legislation was made available," she said.
The founder of Australian Cigarette Cases, an online retailer which offers a range of cigarette cases as "an attractive alternative to the grotesque imagery and dull packs which have been forced upon us" says business has boomed in the past two months. "I've been operating for almost 18 months and I did two-thirds of my total sales in the past couple of months," Jamie Sargeson said.
"There is no question the plain packs have driven a lot of that increase . . . people are seeking an alternative to seeing those hideous images," he said.
With Jonathan Swan