Millennium Post

Govt raps tobacco firms for halting output over ‘85% picture warning’

Slamming the decision of tobacco manufacturers to halt production, the Central Government on Saturday hardened its stand on the implementation of larger pictorial warnings on such products, saying it will take all the necessary steps to curb tobacco use in the country. The Union Health Ministry said there is “no ambiguity” in the policy in this regard and it has been made “crystal clear” that products packaged after April 1 will have to carry larger warnings. “We want to clarify that there is no ambiguity. This is a bogey raised by the tobacco industry,” a senior ministry official said. “The case is crystal clear. We had issued the notification in September last year. If they had found an ambiguity, why did they send their letter in March, 2016,” he added.

The comment comes a day after major cigarette manufacturers, including ITC, Godfrey Phillips and VST, decided to shut all their factories and stop production citing an “ambiguity” in the policy mandating larger pictorial warnings covering 85 per cent of the packaging space.  The ministry’s September 24, 2015, notification for the implementation of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014, which prescribes larger pictorial warnings on tobacco products came into force on Friday.

Sources said the ministry implemented the decision after the Rajasthan High Court directed it to do so. They added that the tobacco manufacturers “should go to court if they have an issue with the government’s notification”.

Notwithstanding a parliamentary panel’s recommendation for a drastic reduction in the size after it described the proposal for 85 per cent pictorial warning as being “too harsh”, the Centre has gone ahead with its implementation. 

The companies, which are members of the Tobacco Institute of India (TII), together account for more than 98 per cent of the country’s domestic sales of duty-paid cigarettes. They claimed that the estimated production revenue loss would be to the tune of over Rs 350 crore per day for tobacco product manufacturers.

“Owing to the ambiguity on the policy related to the revision of graphic health warnings on tobacco product packs, the members are unable to continue manufacturing cigarettes from April 1, 2016,” Tobacco Institute of India said in a statement. State authorities and police will implement the new rule and conduct periodic inspections to ensure compliance.

Dismissing the talk of revenue loss by the tobacco manufacturers, health ministry sources said “there are actually no losses” if one undertook an overall social cost analysis keeping in mind the money which the government spends on anti-tobacco campaigns and the health benefits which people get. “There is only benefit,” they said.

Tobacco Institute of India Director Syed Mahmood Ahmad said the Indian tobacco industry had written to the health ministry on March 15 seeking clarification on the matter. The Parliamentary Committee on Subordinate Legislation had recommended that the message occupy 50 per cent of the packaging space. 

The ministry had told Rajasthan High Court that its legislative authority is examining the observations/ recommendations of the Parliamentary Committee on Subordinate Legislation.

ITC adamant, asserts ‘not ready to print larger pictorial warnings’ 
Fast moving consumer goods (FMCG) major ITC on Saturday said that it is not ready to print larger pictorial warnings on its cigarette packs, as required under a new government norm, and its factories will be shut till clarity emerges on the matter. Since Friday, under a new government notification, tobacco products are required to carry larger pictorial warnings covering 85 per cent of the display area on packets.

Insisting that “the question of the legality of the new warnings has been and continues to be pending before the Court”, the company said it “did not commit to wasting substantial resources in creating the large number of cylinders and other tools necessary for a change-over of the warnings”. 

“As a result, the company is at present not in readiness to print the health warnings,” the company said in a BSE filing. “ITC has been compelled to shut its cigarette factories with effect from April 1, 2016, until clarity emerges in the current uncertain state of the rules on health warning,” it added.

The company further said the implementation of any change in the health warnings on the cigarette packages is an elaborate process for the manufacturers, entailing months of preparation involving substantial cost and effort. 

“Since the matter of new health warning was under the Parliamentary Committee’s consideration, and the government had itself held out that it would await the committee’s report, the industry was led to believe that the government would re-notify new health warnings after considering the committee’s recommendations,” it added.

The Kolkata-headquartered firm manufactures a range of cigarettes, including India Kings, Classic, Gold Flake, Navy Cut, Capstan, Bristol, Flake, Silk Cut, which are manufactured at plants in Bengaluru, Munger, Saharanpur, Kolkata and Pune. In 2014-15, ITC had a consolidated sales of Rs 17,765.99 crore from cigarettes, which accounted for 46.22 per cent of its net sales of Rs 38,433.31 crore. 
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