Local dairy representatives say the SmokeFree 2025 Bill could wipe out the industry following an already challenging year.

The bill, introduced in June this year, has passed into law (Royal Assent on 16 December), and will restrict the number of tobacco retailers.

The government wants a smoke-free generation, and aims to prevent young people born on or after 1 January 2009 from ever taking up smoking.

Small businesses and dairies are now wanting to fight the bill.

Dairy and Business Owners Group chairman Sunny Kaushal said 50 percent of dairy revenue comes from selling tobacco.

"The government wants to reduce the number of cigarette outlets from 6000 to 600. That would mean the existence of thousands of dairies is uncertain," he said.

He said each of these 600 licenses are the equivalent of winning Dr Ayesha Verrall's "cigarette powerball."

"This government not only rips into us for collecting over $2 billion each year in tax we bleed for, but is as hooked on that tobacco excise as smokers are on nicotine."

"The biggest winners will be the gangs. Forget tinnie houses, say hello to ciggie houses."

Sunny Kaushal. Photo: RNZ / Jessie Chiang

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Kaushal wants the government to zero rate the tobacco excise on low nicotine tobacco for the next 27 months.

"They should scrap excise on smokeless tobacco vaping because it's a lot safer than smoking, we sell some of these products right now, but no one will touch low nicotine tobacco if it costs the same, if not more, than the real thing."

Associate Health Minister Dr Ayesha Verrall said many retailers around the country have already opted to stop selling tobacco.

"Ngā Tai Ora Public Health Unit in Northland did a survey looking at 25 retailers who made the choice to end the sale of tobacco, of which 88 percent experienced either a neutral or positive financial impact," she said in a statement.

New Zealand's smoking rate is already low with just 8 percent of adults smoking daily, down from 9.4 percent a year and a half ago and half the rate compared to 10 years ago.

Action for Smokefree 2025 is a leading independent campaign voice for tobacco control measures in New Zealand.

Its chair, professor Robert Beaglehole, said there are about 5000 preventable smoking deaths each year.

"The poor have been left behind with inequalities in smoking rates unchanged over the last decade.

"Almost one-third of the life expectancy gap between Māori and Pākehā is due to cigarette smoking."

Hāpai Te Hauora representatives said they are pleased to see the recommendations in the Health Select Committee report on the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Bill.

Selah Hart, chief executive officer of Hāpai Te Hauora, said the recommendations are well aligned with the expectations of the public health sector and show a strong commitment to equity and harm reduction for Māori.

"This is a vital step towards equity and reducing the harm of tobacco among New Zealanders, especially for our most underserved populations, wāhine Māori, and Māori and Pasifika whānau in general."

About 14 people die a day due to smoking, with Māori disproportionately impacted, according to the bill's data.

"We are confident that the recommendations will begin to address the deadly addiction that has been sold to our people, and end the intergenerational harm to our whakapapa," Hart said.

-Mohammad Alafeshat, RNZ