Economy

Government, Tobacco Companies Engage in Staring Contest Over New Pictorial Warning Rule

“Whatever needs to be done to curb tobacco consumption will be done,” health ministry officials said on the cigarette manufacturers’ decision to close their factories over the new rules.

As tobacco companies shut shop, the Government stands firm for now on its new warning policy. Credit: Ava Randa

As tobacco companies shut shop, the Government stands firm for now on its new warning policy. Credit: Ava Randa

New Delhi: A day after major cigarette manufacturers ITC, Godfrey Philips and VST  shut their factories over a new policy mandating larger pictorial warnings on cigarette packages, the Government responded sharply, saying that “whatever needs to be done to curb tobacco consumption, will be done”.

Some of India’s biggest tobacco companies shut their factories on Friday, citing an “ambiguity” in the new policy, which has been widely expected to cut down on smoking rates and the incidence of tobacco-related diseases within India. A recent WHO report pointed out that smoking and tobacco-related diseases brought on a Rs. 1.04-trillion economic burden to the Indian economy.

Tobacco Institute of India (TII) Director Mahmood Ahmad said that the tobacco industry had written to the Ministry of Health & Family Welfare on March 15th, 2016 to seek a clarification on the new rules.

On Saturday, however, the government showed no signs of sympathy, with health ministry officials pointing out there was no “ambiguity” in the policy and it had been made “crystal clear” that products packaged after April 1 would have to carry larger warnings.

“We want to clarify that there is no ambiguity. This is a bogey raised by the tobacco industry. 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,” a senior ministry official said.

“They could have done it earlier. Our stand is very clear. Whatever needs to be done to curb tobacco consumption, will be done. We have clarified that products manufactured after April 1 will have to carry larger pictorial warnings covering 85 percent of the display area,” the official added.

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 the 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 government has gone ahead with its implementation.

No more cigarettes?

According to a TII release, the decision to shut down production will result in an “estimated daily loss of Rs. 350 crore in production turnover” for the overall tobacco industry, which consists of factory workers and tobacco farmers.

Does this mean that the supply of various tobacco products will stop? According to a DNA report, existing stock of cigarettes could last a few weeks even if production is halted for a few days.  “However, if the halt in production continues it could be a problem. Retail prices are also expected to rise if retailers sense shortage and could also lead to customers moving to buy illegal cigarettes,” the report says.