Regulators

Despite industry's closure threats, govt. implements 85 per cent pictorial warning on tobacco packets

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New Delhi: Close on the heels of imposing stringent punishments to vendors of tobacco products in the vicinity of educational institutions in January and raising the tax in the budget in February, the Government has implemented its decision asking manufacturers to use 85 per cent space on tobacco packets on health warnings. The decision has come into effect from this month. An affidavit filed by the Health Ministry before the Rajasthan High Court on 28 March said the warning would appear on both sides of tobacco products and come into force from 1 April.

This follows a decision taken in September last year, after an earlier order for implementation from April 2015 was stayed in June by the Government to allow a parliamentary committee to study the issue further. The Cigarettes and Other Tobacco Product (Prohibition of Advertisement & Regulation of Trade and Commerce, Production, Supply and Distribution) Act also prohibits the sale of cigarettes or other tobacco products to people below 18 years and in areas within a 100- metre radius of educational institutions.

The Government nailed its latest decision by informing the Rajasthan High Court earlier this week to stick to its decision of 85 per cent pictorial warnings on every packet, thus forcing major tobacco companies to consider shutting shop in India. Interestingly, the Government has bypassed the advice of the Parliamentary Committee which recommended only 40 per cent pictorial warning. Until now, the coverage was forty per cent.

The Tobacco Institute of India  said a unanimous 'closure' decision was  made by the players in the industry in response to the 'ambiguity' in the centre’s policy on pictorial warnings on tobacco product packs. Prominent members of the TII including ITC, Godfrey Phillips and VST have already announced their decision in this regard. ITC is already understood to have shut down five of its units. ITC, Godfrey Phillips and VST reportedly account for over 98 per cent of domestic cigarette sales, along with other members of the Institute.

TII in a press release estimated a daily loss of Rs 350 crore in revenue for the tobacco industry from the production stoppage. It asserted that the revised pictorial warning would promote the trade in illegal cigarettes and affect the livelihood of 45.7 million (4.57 crore) people dependent on the industry.

The Indian tobacco industry had in mid-March written to the Health Ministry seeking clarification but did not get any reply, leading to the decision for closure 'fearing, potential violation of rules by continuing production.'

TII has claimed that illegal cigarettes account for one-fifth of the industry, resulting in an annual revenue loss of Rs 9,000 crore to the exchequer. It even blamed 'foreign-funded anti tobacco activists' and 'vested interests' for pushing such a policy.

In fact, many of the tobacco majors in the country have already made inroads in other sectors like hotels, FMCG etc.

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