Entrepreneur Dick Smith may go to the High Court after his innuendo-laden Australia Day commercial featuring a joke about asylum seekers was deemed too offensive for prime time TV.

In the 60-second advertisement Mr Smith lampoons Sam Kekovich's lamb ads as being "as wrong as a dead dingo's donger", while a farmer and a factory worker exclaim "I love Dick".

The ad also features Mr Smith inviting consumers to "chow down on my OzeNuts" peanut butter, as well as a grey-haired, cardigan-wearing grandma saying "there's only one Dick I'll be eating on Australia Day".

A blog post yesterday by the ad's creator, Hungry Beast and Can of Worms comedian Dan Ilic, said Mr Smith had booked more than $100,000 in advertising spots during Saturday's 6pm news bulletins but had failed to gain the G rating required from classifications board Commercials Advice (CAD).

In the post, Mr Ilic, 31, claimed the CAD would only give the commercial a PG rating because of a scene depicting refugees escaping a burning boat while Mr Smith waits on the beach, holding a selection of his products.

"The taste is a beauty, why else would thousands be trying to get here?" Mr Smith says, as a group of tired asylum seekers struggle onto the sand with a burning boat visible in the background.

Mr Ilic wrote that Mr Smith, who is overseas on business, was "furious, incredibly upset" when he found out the CAD's decision and sent him a "barrage of angry texts".

A screenshot of a text message reportedly from Mr Smith posted on Mr Ilic's blog reads: "It's a total disaster. After six months of planning and tens of thousands I spent I just (sic) believe the ad has been rejected.

"The fun police have banned my harmless fun aust day ad. The day of the aussie larrikin is clearly over."

Mr Smith today told News Ltd he was determined to fight the CAD's decision and have the ad aired.

"I'm considering going to the High Court to get an injunction so they are forced to run it - I'm just very against censorship of any kind," he said.

However Smith did admit the ad was shocking.

"The first time I saw it I was horrified," he said.

"But I showed it to my staff who are mostly a lot younger and they thought it was great - they love dick jokes.

"It's all a bit of harmless fun but I may get a few calls from the refugee community - I think it's light-hearted, it's supposed to be tongue in cheek."

The ad is also the first time Smith has publicly said his business Dick Smith Foods is a charity - which has already raised $4.8m in Australia.

The ad racked up more than 1000 views overnight on YouTube, but this morning had been removed from the site.

Originally published as Aussies love Dick jokes says Smith