Action on Smoking and Health director Ben Youdan said the group commissioned an analysis of illicit tobacco after the industry raised the issue at the Maori affairs select committee tobacco inquiry in 2010.
It found holes in the industry's claims that the tobacco black market was much bigger than previously thought.
Mr Youdan said New Zealand's tobacco black market was small and was at the lowest level of all countries with a similar regulatory environment.
It was likely to remain small because of New Zealand's geographical isolation and strong border controls.
"I think it is a nonsense argument."
Australia is the first country to introduce plain packaging, with a law that will come into effect in December. Britain has begun consultation on following suit. In New Zealand, the Cabinet has agreed to impose plain packaging, subject to a consultation process.
New Zealand first considered plain packaging in 1989, as part of the policy that led to the ban on tobacco advertising the next year.
The Health Department's Toxic Substances Board recommended cigarettes be sold in white packets with simple black text and no colours or logos.
The former departmental official who serviced the board, public health specialist Dr Murray Laugesen, doubted plain packaging would have much effect on adult smokers who knew what brand they wanted - other tobacco control researchers disagree - but he predicted it would help reduce the rate of teenagers and young adults taking up smoking.
He said plain packaging, which would probably coincide with an expansion of the pictorial health warnings on packets, would build on the effects of the retail display ban that comes into force on July 23.
"The whole retail environment is changed. When a young person goes in to buy their first packet of cigarettes they are confronted by seeing nothing - a pull-down cover on all the cigarettes," Dr Laugesen said.
"There will presumably be a price list. They will then get the cigarettes. The brand name will be printed on the pack, like Marlboro Red 20s, but then the retailer will put them face up on the table and they are looking at a very nasty picture of someone's gangrenous toes.
"It will not be visible to their friends what kind of cigarettes they are smoking. It will no longer be Marlboro Red identified by its distinctive red colour, or a blue-tinted mild brand, it will just be small-print letters. So as a fashion item, it will not be a trendsetter."
Sydney University public health professor Simon Chapman said tobacco companies' documents released after litigation showed clearly they used cigarette packaging as an important part of marketing.
He and colleagues, writing in the journal Addiction, cited a Philip Morris document which said packs aimed at younger women should be "slick, sleek, flashy, glittery, shiny, silky, bold".
"If you smoke, a cigarette pack is one of the few things you use regularly that makes a statement about you," an employee of another company said. "A cigarette pack is the only thing you take out of your pocket 20 times a day and lay out for everyone to see."
Countering the industry argument that no evidence showed plain packaging would cut smoking prevalence, the journal article cites research showing mock-up plain packaging is found to be unappealing, people remember health warnings on plain packs better and the warnings are considered more serious.
In Britain, an industry-funded smoking rights group has started a Hands Off Our Packs campaign.
It offers the smuggling and no-evidence arguments, but also adds the slippery-slope argument that once plain packaging is used, the "health lobby" will soon push for plain packaging of alcohol and processed foods.
The campaign also decries the "denormalisation" of tobacco, of which plain packaging is a part, saying it stigmatises smokers, who have "have done nothing wrong."
But tobacco control campaigners say tobacco is not a normal product - it is the only consumer product which kills up to half its long-term users when used as intended.
LOOKING PLAINER
* Australia will be the first country to introduce plain packaging for cigarettes.
* The law will come into effect in December, and Britain has begun consultation on following suit.
* In New Zealand, the Cabinet has agreed to impose plain packaging, subject to a consultation process.
* It is recommended cigarettes be sold in white packets with simple black text and no colours or logos.
