INDIA - In a demonstration of defiance against the Indian government imposition of an 85% health warning to cover cigarette packaging, FMCG major ITC shut down production at all of its Indian factories, claiming that it is not wasting substantial resources to print larger pictorial warnings on its cigarette packs, until clarity emerges on the matter.
Under a new government notification, tobacco products are required to carry larger pictorial warnings covering 85% of the display area on packets.
According to a statement from the company: “the question of the legality of the new warnings has been and continues to be pending before the Court”, adding that 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 filing to the Bombay Stock Exchange.
“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 explained, in its filling, that 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, at plants in Bengaluru, Munger, Saharanpur, Kolkata and Pune. In 2014-15, ITC had consolidated sales of US$2.681 million (Rs 17,765.99 crore) from cigarettes, which accounted for 46.22% of the company’s net sales.
The notification by the health ministry on September 24, 2015, for implementation of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014, came into force on April 1.
The ministry had made a commitment to the Rajasthan High Court on March 28, 2016 that it will implement the said rules from April 1, 2016.
The Parliamentary Committee on Subordinate Legislation had described as “too harsh” the government’s proposal that 85% of the packaging surface carry pictorial warnings and recommended that the message occupy 50% of the space.
The stand had evoked sharp criticism from MPs and health experts.
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