The grocery giant has priced the “home brand style” packs of 25 cigarettes at around $11 almost $4 a pack less than Australian made Winfield and other leading brands.

They are believed to be the cheapest on the market since the federal Government raised cigarette taxes by 25 per cent in April.

The cigarettes are labelled “Made for Australia”. Only in smaller letters on the side of the packs does it reveal “Made in Germany”.

The packs carry unfamiliar names such as Bayside, Deal, Harvest and Tradition and are being promoted by Coles as a cheaper alternative to well known brands.

Coles began selling its discount line in November last year.

It refused to reveal how much money it was making out of the deal with its German manufacturer Von Eiken and Australian tobacco wholesaler Richland Express.

“Coles has introduced a small number of branded cigarette lines sourced from overseas, available exclusively in our stores,” a Coles spokesman said. He said the deal was established to offer more choice for customers, not to undermine the federal Government’s cigarette tax.

But a Coles employee, who did not want to be named, said she had been told to “push the overseas cigarettes” to customers struggling with higher prices after the tax rise.

“When customers come in and complain that their usual cigarettes are too expensive we suggest they try one of the new ones, like Tradition,” she said.

“I have been selling cigarettes for four years now. Lately I have noticed people just want the cheapest ones.”

The move, which positions Coles to profit when mandatory plain packaging of tobacco products is introduced in 2012, has outraged anti tobacco campaigners and health experts.

“It really underlines the need for the Government to introduce a floor price for cigarettes, which is a price you can’t go below,” University of Sydney Professor of Health Simon Chapman said.

Research from the Cancer Council of NSW shows 2.9 million Australians smoke on a daily basis. Cancer Council of NSW program manager Anita Dessaix said Coles was being “sneaky”.

“Smoking has been trending downward we really want to see tobacco control strategies heading in the right direction, and this is sneaky and disappointing,” she said.

Rival supermarket giants Woolworths and Franklins said they would not follow the example of Coles.

Richland Express spokesman Paul Daly said “I think this is the evolution of the industry and I think very soon all tobacco products will be manufactured overseas.”

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