Federal Health Minister Nicola Roxon has expressed frustrations that Coles supermarkets are circumventing the government's policy on restricting access on cigarettes and actually offer cheaper prices for the product.

Coles sources more affordable cigarettes from Germany and in turn sells them for a much cheaper retail price of $11 per packet, which is about $4 less from any other brands locally processed in Australia.

Ms Roxon conceded that the giant retailer is not breaking any law in adopting the practice but she admitted that the government is disappointed by Coles' move, pointing out at the same time it was heartening to realise that other supermarkets were not following suit so far.

She said that it was good to see that "other chains like Woolworths and Franklins are not taking this step and perhaps some people will make their choices as consumers to go those businesses which are being more responsible and trying to help discourage people from smoking."

Coles, however, denied that it is deliberately avoiding higher federal tax being imposed on cigarettes by importing the products' cheaper counterparts as the retail giant clarified that it first started offering the cigarettes as early as November last year, which was way before the tax took effect.

The retailer also argued that such imported cigarettes on their shelves carry almost the same tag price as the other popular discounted brands offered locally.