ITC shuts its cigarette factories over warning confusion

Cigarette maker ITC on Saturday said it has shut down its cigarette factories until "clarity emerges" on the rules on health warning".

"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," the company said in a BSE filing.

Until now, cigarette packs carries a warning covering 40 percent of the front of the pack. A parliamentary committee, in its report tabled in the Lok Sabha on March 15, recommended that the new health warnings be modified to occupy 50 percent of the front and the back panels of the cigarette package.

However according to a government notification, the pictorial warning should cover 85 percent of the front and the back panels of the cigarette packs effective from this month.

The company said: "Parliamentary committee was actively engaged in hearing and considering the representations of various interested parties, but MoHF (ministry of health and family welfare), contrary to its earlier decision to await the Committee's findings, on September 28, 2015 notified that the new warnings would come into effect on April 1, 2016."

According to the filing, the industry was led to believe that the government would re-notify new health warnings after considering the committee's recommendations.

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

"In this situation, the company, as any prudent person would, 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," it said.

As a result, the company is at present not in readiness to print the health warnings as now once again notified, the cigarette maker said.