The Australian rules would force tobacco companies to sell cigarettes in buff packaging free of trademarks and logos but carrying dominant pictorial health warnings.
Australian senators approved the legislation today (10 November), but amendments must still be approved by the lower house before becoming law in December 2012.
Dalli is preparing an impact assessment of policy options in advance of the European Commission's own review of its 2001 Tobacco Products Directive. The review is scheduled for early next year.
Various ideas, including plain packaging, are being considered within this process and the tobacco industry, retailers and distributors, are nervous that the Maltese Commissioner will be tempted to follow the Australian example - the first of its kind.
A spokeswoman for Dalli, himself a reformed smoker, said that the Commission has not yet made up its mind on plain packaging, but added that it was following the Australian development "carefully and with interest".
Warnings from retailers
A working group organised by the federation of tobacco retailers (CEDT) meeting in Brussels on Tuesday (8 November) blasted plain packaging and claimed that the Commission's health officials were not listening to industry or retailers on the issue.
CEDT President Giovanni Risso said that if measures such as display bans, plain packaging, oversized health warnings and bans on ingredients were introduced, these could result in a loss of up to €20 billion in European tax revenue.
Meeting representatives also said that smugglers and counterfeit manufacturers would increase their already burgeoning activity as a result of plain packaging.
One retailing representative told the meeting: "Dalli has no authority to introduce harmonisation of retail in this way using the Single Market Act, since there have been no complaints about distortions in the market. There is no competence here."
The question of legal authority was later stressed by another source close to the tobacco industry, who told EurActiv: "We will take him to court if he tries to introduce it (plain packaging) and we are confident we would have a good case."
In Australia, British American Tobacco (BAT) said it would initiate legal action in the nation's top court in a bid to repeal the upcoming plain packaging law, claiming it is unconstitutional.
Industry getting jittery in advance of proposals
Plain packaging is one of the key areas of concern of industry, distributors and retailers as the Commission's impact assessment takes place. EurActiv understands that a number of meetings have been arranged in Brussels for later this month in which tobacco industry representatives will discuss proposals and strategy with MEPs and consultants.
One likely focus of attack is intellectual property rights, since plain packaging has a smothering effect on companies' logos and trademarks.
A Commission spokeswoman said Brussels was in direct dialogue with the Australian government in respect of intellectual property ramifications of any plain-packaging proposal.
"The EU also asked Australia for more information on how its commitments under other WTO agreements, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights, had been taken into account," she said.