Reporter: Elizabeth Jackson

COMPERE: A new brand of peanut butter, launched by Dick Smith Price Of Cigarettes, is at the centre of an advertising and censorship row. Mr Smith's produced a television advertisement featuring his peanut butter and a packet of Peter Jackson cigarettes. His point - that Phillip Morris, which owns the Peter Jackson cigarette brand, also owns Kraft which makes peanut butter Pack Of Cigarettes.

But the Federation of Australian Commercial Television Stations has censored the ad, telling Dick Smith he can't show a cigarette packet and can't say that smoking kills our kids.

Dick Smith says he's very angry about the decision.

Elizabeth Jackson with this report.

DICK SMITH: Hi. I'm Dick Smith. Kraft and Eta peanut butter are the brands that most Australians buy. They are owned by the American tobacco giant Phillip Morris, which also owns [beep] cigarettes.

ELIZABETH JACKSON: It's not his balloon but Dick Smith's peanut butter that's in the news today.

DICK SMITH: It means you're supporting the company that [beep] our kids with these.

ELIZABETH JACKSON: The Federation of Commercial Television Stations, FACTS, says Dick's ad breaches the Tobacco Advertising Prohibitions Act because its sole purpose is not to discourage smoking but to promote peanut butter How Many Packs Of Cigarettes Are In A Carton. Dick doesn't agree.

DICK SMITH: It looks as though they've gone through the Tobacco Act and somehow tried to desperately find a loophole so I won't show this cigarette packet on television. I mean I simply don't believe it. Can you imagine some Government Minister deciding to lift the licence of a TV station because Dick Smith is showing a cigarette packet of Peter Jackson and saying it kills our kids? I mean it just wouldn't happen. It's totally ridiculous.

ELIZABETH JACKSON: But it's true to say, isn't it, that the sole purpose of your advertisement is not to discourage people from cigarette smoking but it is also Marlboro Black Menthol, presumably, to promote your peanut butter.

DICK SMITH: Absolutely. It's got a dual purpose, but I don't believe that interpretation is correct. If you looked at it that way, you could never show a cigarette packet on anything because you'd say oh look, it's advertising cigarettes and the sole purpose is not to tell people not to smoke. That is totally ridiculous.

Commercial television shows the most revolting things that I've ever seen. People maiming each other and killing each other, and I can't hold up a cigarette pack. It has to be censored off with pixels. It's totally ridiculous.

ELIZABETH JACKSON: The Federation spokesman, David McCulloch, says Dick Smith's ad is also in breach of the Trade Practices Act.

DAVID MCCULLOCH: In this case there was a statement in the commercial essentially to the effect that the company Cheap Cigarettes Near Me. the tobacco company in question kills children.

ELIZABETH JACKSON: Well it does, doesn't it?

DAVID MCCULLOCH: Em, it might be a pedantic argument but it is certainly arguable that to the extent that smoking kills, it kills children when they become adults. And .

ELIZABETH JACKSON: But only because they've been smoking since they were children.

DAVID MCCULLOCH: Well, that may well be the case but it is certainly an argument that could be run by a lawyer and it is not impossible that such a claim would be upheld by a court.

ELIZABETH JACKSON: So despite the fact that it's clearly written on the packet that smoking kills, it's not acceptable for Dick Smith to say that in a TV ad?

DAVID MCCULLOCH: The TV ad says that smoking kills children. And .

ELIZABETH JACKSON: And you're saying that it only kills them when they're adults, therefore it's not appropriate?

DAVID MCCULLOCH: It is arguable that that is misleading and deceptive.

ELIZABETH JACKSON: Dick Smith's ads will still go to air, with a few bleeps and black spots thrown in. They're scheduled to begin on Sunday but according to Dick, his ads have been ruined. He says the Federation will do anything to protect Phillip Morris and its massive advertising revenue.

DICK SMITH: Kraft, which are owned by Phillip Morris, are huge advertisers. Phillip Morris is an incredibly powerful company. No-one wants to offend it so I'm sure there is a percentage of saying don't offend Phillip Morris Cigarettes Brands. They're very powerful. Their subsidiaries spend tens of millions on advertising. Let's see if we can get this ad off the air.
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