Australian food entrepreneur Dick Smith says that the Commercials Advice (CAD) board was wrong to effectively ban his advertisement full of "Dick jokes" by giving it a PG rating instead of the required G rating.

According to ad creator Dan Ilic, Dick Smith foods had planned to run over $100,000 in advertising on Saturday's Australia Day, but it was given a PG rating because of a scene showing refugees escaping from a burning boat to enjoy Dick Smith's OzEmite, an alternative to the Vegemite product marketed by American-owned Kraft Foods.

But for many, it will be the barrage of penis innuendos like "I love Dick" that raise eyebrows.

"This is as wrong as a dead dingo's donger," Smith says in the advertisement, referring to "false patriotism" in competing food commercials.

"There's a quick and easy solution to this," the blog dlisted explained on Thursday. "They should just edit the commercial all the way down and only show the true star, the Barbara Bush-looking memaw who says, 'There's only one Dick I'll be eating on Australia Day.' She's at the 0:20 mark and she delivers her line like a memaw who knows her Dicks."

Smith admitted to Australia's Herald Sun that he was "horrified" the first time he saw the ad.

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

Smith is considering appealing CAD's PG rating to Australia's High Court.

Watch the video below from Dick Smith Foods.