Hospitality New Zealand has called the proposal to ban smoking in outdoor areas as "social engineering."
City and regional councils have asked the Government to develop and implement legislation to prohibit smoking outside cafes, restaurants and bars.
A vote at Local Government New Zealand's annual general meeting last week had 70 per cent vote in favour of the ban.
Hospitality New Zealand chief executive Bruce Robertson told Radio NZ that it is "discriminatory" to single out bars and restaurants. "We believe it should be the members choice, really, to allow smoking or not," he said.
"This is very targeted, if they were genuine the ban should be across all cinemas, parks and government buildings.