Cigarette makers tumble on buzz Govt likely to ban sale of loose cigarettes

Shares of three cigarette makers fell by 0.92% to 5.43% at 10:44 IST on BSE on media report that the government is planning to ban the sale of loose cigarettes.

Godfrey Philips India (down 5.43%), VST Industries (down 2.09%) and ITC (down 0.92%), edged lower.

The S&P BSE Sensex was down 107.49 points, or 0.39% at 27,157.83.

According to the reports, the government is considering a proposal to ban the sale of loose cigarettes, a move that will hit ITC and other cigarette makers hard as 70% of retail takes place in this form. This is one of the many measures proposed by an expert panel set up by the health ministry. Other suggestions include raising the age limit for consumption and increasing the fine for smoking in public spaces to Rs 20,000 from Rs 200, apart from making this a cognizable offence, the report suggested.

If accepted, these suggestions on curbing tobacco consumption could soon be part of tougher legislation being drafted by the Modi government, which it wants to introduce in the winter session of Parliament as it looks to curb the damage caused by the habit in the form of cancers, cardiovascular diseases and other health issues. Headed by the Delhi government's former principal secretary Ramesh Chandra, the expert panel submitted its report to the health ministry last week, the report added.

The report estimated that the impact on volumes of cigarette manufacturers could be anywhere between 10% and 20% as only some consumers will be able to afford the shift to packets.

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