India’s tobacco majors on Friday announced that they are shutting down their cigarette factories effective.
The move came after the government made it mandatory that all tobacco products carry larger pictorial health warnings, covering 85% of the packaging space, which came into effect on Friday as well.
The cigarette industry body, Tobacco Institute of India (TII), said in a statement on behalf of its members including ITC Ltd, Godfrey Phillips and VST Industries:
“Members of TII, who account for more than 98% of the country’s domestic sales of duty paid cigarettes in India, have unanimously decided to shut all their cigarette factories with effect from April 1, 2016...Owing to ambiguity on the policy related to revision of graphic health warnings on tobacco product packs, the members are unable to continue manufacturing cigarettes from April 1, 2016.”
TII director Syed Mahmood Ahmad said the tobacco industry had written to health and family welfare ministry on March 15 seeking clarifications.
The government ruled out any ambiguity in the rules.
“There is absolutely no ambiguity in the law or policy over the size of pictorial health warnings. The recommendations of the Parliamentary Committee on Subordinate Legislation are not binding and the final decision lies with the Union ministry of health and family welfare,” said C K Mishra, additional secretary, ministry of health and family welfare
The decision to shut factories is expected to cost Rs 350 crore loss per day in production turnover for the Indian tobacco industry.
Companies say the existing pictorial warnings of 40% of the front of the pack are adequate to warn and caution consumers. “The extreme 85% warnings will promote illegal cigarette trade and adversely affect the livelihood of 45.7 million people dependent on tobacco which included farmers, labour, workers, trade and others,” TII claimed.
ITC and Godfrey Phillips did not respond to HT’s mails.