TOBACCO industry claims that international crime gangs are flooding Australia with smuggled cigarettes, or ''chop chop'', are being investigated by the competition watchdog.

But the allegations have been emphatically denied by Customs and Border Protection.

Customs and Border Protection seized significant amounts of tobacco being smuggled into Australia from China in 2010. Credit:Craig Abraham

The claims are part of a campaign against the Gillard government's plan to introduce plain packaging for cigarettes, which is expected to culminate in a constitutional challenge in the High Court of Australia.

British American Tobacco Australia chief executive David Crow warned last week that plain cigarette packets would provide a ''field day'' for organised criminals, who had profited from a 150 per cent increase in illegal tobacco in Australia over the past three years.