The Australian government said on Thursday that issuing much affordable cigarette brands in the market was an act of desperation coming from the British American Tobacco Australia (BATA), which recently unleashed a new brand that sells for only $11.50.

According to Health Minister Tanya Plibersek, when BATA decided to introduce 'Just Smokes' for a very cheap price, the company effectively unmasked its sole intent of cashing-in on the vulnerability of young smokers who will naturally favour the lesser-priced cigarette brands.

In a statement the Health Ministry released today, Ms Plibersek maintained that almost everyone is aware that "young people are the most price-sensitive smokers of all."

"And by dropping their prices British American Tobacco appears to be directly targeting vulnerable teenagers." The Health Minister lamented.

While a cigarette pack normally retails at $16, BATA configured Just Smokes to sell way below the price range of its competitors to survive on what it termed as the competitive dictates of the market.

The emergence of cheap but legitimate brands is the market's natural reaction to the imposition in 2010 of the 25 per cent tobacco excise tax, BATA spokesman Scott McIntyre said in statement today.

Since the tax was introduced, BATA said the cheap segment of the market saw growths of up to 63 per cent, which has yet to include the proliferation of counterfeits that smokers can purchase for less than $10.

To avoid the extra charges, Australian smokers will switch to the more affordable products, which Mr McIntyre said is an emerging trend that BATA cannot ignore.

"The tobacco industry is extremely competitive so if smokers continue to ask retailers for cheaper smokes, that's where the industry will battle for market share which will potentially see prices drop further," the BATA representative said.

"Our customers have been down-trading to cheaper products or illegal cigarettes so we've been forced to compete," Mr McIntyre added.

He warned too that such business trend will only flourish "if the government keeps giving us ad-hoc excise increases like they have in the past then all they'll do is make the problem worse."

Manifestation of such problem, he hinted, is the likely spikes in the number of Australian smokers as cheaper cigarettes become readily available to the public.

"One could assume (such eventuality) if prices keep getting cheaper and cheaper and there's a huge growth in that area," Mr McIntyre admitted in an interview with ABC.

Meanwhile, the Australian Medical Association (AMA) has voiced out grave concerns that excise tax interventions coming from federal authorities seem to create the opposite effect on the market - tobacco companies resort to cheaper products that draw patronage from smokers.

AMA President Steve Hambleton told The Herald Sun that prices could very well influence smokers' decision to light a stick or not but he admitted that when the contrary is what's happening then the government should be very concerned.

But Ms Plibersek appears unfased by the techniques being employed by tobacco makers as she told ABC that the government intends to "keep looking at what we need to do to continue to reduce the rates of people smoking in Australia."