Anti-smoking group ASH claims a body set up to oppose the raising of tobacco prices through higher taxation is a front for tobacco interests.
The Association of Community Retailers was established last month, and ASH says it works from the same offices as a Wellington public relations consultant who represents Imperial Tobacco.
ASH director Ben Youdan says the association supports the views of tobacco companies and should reveal its funding sources.
Imperial Tobacco is yet to comment, but PR consultant Glenn Inwood denies the company is funding the retailers association.
He says he pays the association's costs, which will eventually be covered by membership fees.
An association spokesperson, Richard Green, says to his knowledge, the group is not funded by the tobacco firm.
Mr Green says he asked Mr Inwood to approach another company, British American Tobacco, for funding, but says the request was declined.