The ad, created by cdp-travissully for spin-off cigar range Hamlet Miniatures, received 19 complaints nationwide, some from the Restricted Growth Association.
It shows a group of three dwarves not tall enough to reach the urinals in a public toilet. One is smoking a cigar and offering the packet to the others, who clearly need to relieve themselves.
When the campaign was first launched in December, Gallaher marketing controller Lesley Stears said that the ad had been researched among people with dwarfism in order to ensure it did not cause offence.
Responding to the Advertising Standards Authority, Gallaher said that it had used dwarves because they were intrinsically connected with Hamlet Miniature cigars. It also said that readers would understand that they were laughing with the dwarves, not at them.
However, the ASA said that the poster showed the dwarves in real discomfort "being unable to perform the ordinary everyday task of using a public toilet". It said the poster ridiculed short people and was likely to cause widespread offence.
A second ad, showing five dwarves who do not meet a minimum height requirement for a ride at a fairground, was deemed not to ridicule short people.
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