ITC, Godfrey Phillips and VST, who account for over 98 per cent of domestic cigarette sales, along with other members of the Tobacco Institute of India (TII), have decided to shut their cigarette factories with effect from Friday (April 1).
The unanimous decision was in response to the “ambiguity” in the Centre’s policy on pictorial warnings on tobacco product packs, said a statement by TII, which represents manufacturers, exporters and farmers.
TII estimates a daily loss of ₹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 people dependent on the industry.
Under new rules, the images have to cover 85 per cent of the pack, against 40 per cent earlier.
An affidavit filed by the Health Ministry before the Rajasthan High Court on March 28 stated that the 85 per cent warning would appear on both sides of tobacco products and come into force from April 1. Reports indicate that the affidavit also mentioned observations by a Parliamentary Committee, which had said a warning covering 50 per cent of the pack was enough, giving rise to “ambiguity”.
“The Indian tobacco industry has written to Ministry of Health on March 15, seeking clarification,” said Syed Mahmood Ahmad, Director, TII, adding that TII members had decided to shut the factories “fearing, potential violation of rules by continuing production.”
TII claims that illegal cigarettes account for one-fifth of the industry, resulting in an annual revenue loss of ₹9,000 crore to the exchequer. It even blamed “foreign-funded anti tobacco activists” and “vested interests” for pushing such a policy.
Sources within ITC told our Kolkata bureau that the company has closed its five factories, in Kolkata, Pune, Munger (Bihar), Saharanpur (Uttar Pradesh) and Bengaluru for an indefinite period or till the ambiguity over the pictorial warnings ends.