THE tobacco industry is preparing to fight the federal government in court over its move to introduce compulsory plain packaging for cigarettes. 

Labor will today announce plans to bring in new laws making plain packaging compulsory for cigarettes and other tobacco products by January 1, 2012.

A spokeswoman for Imperial Tobacco Australia says the company is preparing to legally fight the government over the proposed changes.

She's told ABC Radio that introducing plain packaging just takes away the ability of a consumer to identify their brand from another brand.

The spokeswoman says the move designed to make cigarettes less appealing to young people may actually be a bane to public health.

She says it'll make it much easier for counterfeiters to increase the volume of illicit trade in Australia.

Health Minister Nicola Roxon, tipped to also announce a cigarette tax increase, said legislation allowing the packaging changes would be carefully drafted to withstand any legal challenges from the industry.

"We have firm advice that this action can be taken," she said.

Australian Greens leader Bob Brown likes the idea, saying if tobacco companies tried to fight it, he would move to have them pay the cost of smoking on the public health system.

Australian Medical Association president Andrew Pesce said the plan wasn't meant to get smokers to quit, but rather stop young people from starting.

"Hopefully it will ... (stop) children and young people from taking it up by decreasing the attractiveness of the packaging," he said.

National Preventative Health Taskforce adviser Simon Chapman recommended the government adopt the policy, which he said was the most significant attempt to try and stop smoking since tobacco advertising was banned.

"I would expect many other governments to follow very quickly," he said.

"We believe that it is totally inappropriate to allow cancer-causing products to be dressed up in beguiling, attractive boxes."

The government is also tipped to announce a cigarette tax increase today.