Tobacco giant Philip Morris is threatening to sue the Australian government over pioneering plans to remove brand-names from cigarette packets.
Canberra argues that the move, coupled with horror photos on packets, will make smoking less attractive.
Philip Morris fears that removing brand names will make its products less competitive.
The fight over cigarette packaging is being closely watched by other tobacco firms and governments, with New Zealand, Canada and Britain among countries considering similar laws.
Analysts also say plain packaging would hit tobacco firms in emerging markets where they are seeking to lure smokers away from cheap brands to more expensive ones and, if widespread, could lead to takeovers in the industry to cut costs.