Gone was the familiar trademark of his favourite brand, Benson & Hedges, to be replaced by an innocuous image of a cigarette being stubbed out in an ashtray. He had won his first round of health-warning roulette.

The drab olive packages which became mandatory this month feature a variety of new, graphic warning labels designed to confront consumers with the consequences of smoking-related disease.

Some of the images are more confronting than others: there is the eyeball being surgically opened ("smoking causes blindness"), the decaying lung, the cancerous tongue and the stained, rotting teeth.

But the two warning labels giving smokers the most discomfort are the gangrenous foot and the infamous "Bryan", who is pictured brutally emaciated and almost dead from lung cancer. And it is these larger, more shocking graphics - rather than the lack of branding - which are challenging users to reconsider their habits.

"The colour doesn't put me off, it actually looks quite smart to me," says Town, a 26-year old public servant who has decided to quit as his New Year's resolution.

"For me it's definitely more to do with the bigger health warning than the plain packaging itself."

The tobacco companies spent millions of dollars unsuccessfully fighting the government's legislation in the High Court, claiming a breach of their intellectual property rights. They fear plain packaging might be adopted by other, bigger jurisdictions: India and the European Union have already signalled they are considering the model.

But early experience suggests it is not the loss of logos and trademarks which is making cigarettes less attractive: it's the pictures.

"It struck me when I got the gangrenous-foot plain packaging," says Town, who has smoked a pack a day for 10 years. "That's pretty vile. Even my flatmate said he needed to hide my packet of cigarettes because he couldn't bear to look at it."

It is a common sentiment. One young smoker said a friend had started covering his cigarette packets in duct tape to avoid seeing the warnings. Having become desensitised to the old images, the prominence and graphic nature of the new ones had shocked him.

The manager of Sol Levy tobacconist in Sydney's Chinatown, Evelyn Platus, does not believe the new packages will have a lasting impact. She says customers have been using stickers to cover up health warnings since they were first introduced in the 1980s.

"They work out a way to hide it from themselves,'' she says. ''The end consumer is not at all interested in what's on the packet. It makes no difference to them at all."

Many speculated that plain packaging would simply encourage smokers to buy personal cigarette cases, but Platus has seen little interest in them.

"I didn't buy up in preparation, and they're not flying out the door either. People don't care. They're so past it."

What is irking customers is a perceived change in the taste of their cigarettes. The tobacco companies have denied making any alterations to the products themselves, and the Health Minister, Tanya Plibersek, suggested this perception was due to the "psychological effect of marketing".

Still, Platus insists her regular customers have been complaining of a change in flavour. "Some customers are cutting them open and checking them out, and the tobacco's totally different."

Others say they have noticed a change in the taste of their cigarette's filter.

Whether that is perceived or real, it reflects the real resentment and anger that smokers and particularly retailers are exhibiting in the wake of the introduction of plain packaging. For small vendors such as Sol Levy, that's in part because they feel they have been given second-class treatment by the tobacco industry, which in Australia is dominated by three players: British American, Philip Morris and Imperial.

"The cigarette companies loaded up the supermarkets [with plain-packaged products] first," Platus says. The big chains were allowed to swap out unsold coloured stock for new, plain-packaged stock, something that has been harder for small retailers. While Platus has come to an arrangement with British American and Imperial, she has had no response from Philip Morris.

"We haven't heard that they're prepared to refund or exchange, nothing. They have not contacted us, we've tried to contact them and they have not returned a call."

She estimates the transitional period will cost her business $20,000 on top of the $5000 of Philip Morris stock which is now unsaleable.

A spokesman for Philip Morris, Chris Argent, acknowledged that "smaller retailers are particularly likely to suffer these types of costs", but when asked if that was a direct result of his company's actions, would only say that "Philip Morris has been working with the federal government and retailers to ensure a smooth transition to plain packaging".

On the eve of the mandatory rollout, Plibersek drew attention to the problem. "We've written to Philip Morris and insisted that they should take back non-compliant stock because we don't want small shopkeepers, mum-and-dad shopkeepers, to be the ones who suffer here," she said.

But a week later, that intervention appears to have yielded little return.

Such concerns were of little concern at the Lloyds IGA supermarket on King Street, Newtown. Store manager Kakha Tchatchanidze says there have been "no issues" with receiving credit for old stock or changing it over for the compliant versions.

Nonetheless he believes the whole exercise is "pointless", and staff seem to agree. The only change they have noticed is increasing customer frustration at the amount of time it takes staff to find a particular brand amid the plethora of identical boxes.

On the street, a 23-year old occasional smoker who did not wish to be identified said the new packages would not directly change his behaviour, but were adding to the social pressure on light users to give up altogether.

"It's going to be unappealing for the people on the fringe, it's going to make them uncomfortable," he said of the graphic warning labels.

"Everybody's shouting at you to stop doing it."