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British American Tobacco Australia chief executive David Crow displays one of the new, drab olive-green cigarette packets plastered with graphic health warnings. - 

STEVE CHIOTAKIS: In Australia, the tobacco industry is fuming over new proposed rules forcing them to use generic packaging for their cigarette brands. Now the industry's threatening to slash the price of cigarettes to make up for any lost demand.

From Sydney, reporter Stuart Cohen has more.

STUART COHEN: The new law will require all cigarettes to be packaged in the same olive drab colored box -- something research has found makes cigarettes unappealing. Gone will be some of the more iconic images companies have relied on to market their products. Instead, most of the pack will carry highly graphic images of diseases caused by smoking. The brand name will be reduced to a small generic type font, with nothing to distinguish one brand from another. David Crow, CEO of British-American Tobacco, Australia's biggest cigarette company, has a warning for the government.

DAVID CROW: We will obviously focus on pricing, given it's the only thing really left to focus and differentiate brands. More people will smoke, we all know things get cheaper people buy more. And more kids will smoke and that is obviously completely opposite to what the government intends.

The industry is also threatening to sue over not being able to use their long-established logos. Australia's health minister says the government is ready to fight.

In Sydney, I'm Stuart Cohen for Marketplace.