LONDON, March 13 (Reuters) - Britain's advertising regulator has ruled that adverts run by Japan Tobacco's Gallaher last year were "misleading", in an increasingly bitter battle between tobacco firms and anti-smoking campaigners over plain packaging.
Gallaher, which owns brands like Silk Cut and Hamlet and was bought in 2007 by Japan Tobacco, ran a series of British newspaper adverts in 2012 arguing against the adoption of plain cigarette packs.
The adverts were challenged by pressure group Action on Smoking and Health and charity Cancer Research UK, who said the adverts made misleading claims, a complaint that the Advertising Standards Authority (ASA) said on Tuesday it was upholding.
Australia ruled last year that cigarettes and tobacco must be sold in plain packets without branding, a move that is being watched closely by Britain and other countries.
Such a move would likely impact hardest on sales of premium brands, where companies are seeing strongest growth.
Britain passed a law in 2008 to ban the display of cigarettes at the point of sale, but held back from insisting on plain packaging.
In its adverts, Gallaher said that "the policy was rejected in 2008 because there was no credible evidence".
However, the ASA said that readers were likely to interpret that to mean that the government had decided in 2008 to abandon the proposal of plain packaging and not plan to revisit it.
The regulator said that it understood that the government was keeping the measure under review and planned to re-assess it at a later date, though.
"We therefore considered that the claims in the ads that the policy had been 'rejected' in 2008 because of a lack of credible evidence gave a misleading impression of the position and action taken at that time by the government," it said.
It said that the adverts must not reappear again in their current form.
Japan Tobacco said it was "disappointed" by the ASA's ruling.
"Whilst we disagree with the ASA's decision, we will not use the advertisements in question again," it said in a statement.
"We also disagree with those who it appears wish to close down this debate and will continue to express our concerns."
Some media reports have said Britain will introduce plain packaging this year and will announce the measure in May.
Japan Tobacco said it believed no decision has been made.