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In a move that would severely dent cigarette companies’ fortunes in India; the Health Ministry has accepted the recommendations of an expert panel, which proposed a complete ban on sale of loose cigarette sticks. Among other recommendations by the panel, reviewed by Business Standard, include higher penalty for not specifying nicotine and tar contents, under section 20 of the Cigarettes and Other Tobacco Products Act (COTPA), 2003. The recommendation was that the penalty be increased from the current Rs 5,000 to Rs 50,000
The senior panel led by Ramesh Chandra, an advisor in the Ministry of Health and Family Welfare, had recommended that the sale of loose cigarette sticks or tobacco products be banned, as youngsters were finding it 'cheap' and 'convenient' to consume tobacco products.
“The expert panel constituted by Ministry of Health & Family Welfare has inter alia, recommended prohibition on sale of loose or single stick of cigarette, increasing the minimum legal age for sale of tobacco products, increasing the fine or penalty amounts for violation of certain provisions of COTPA 2003, as well as making such offences cognizable. The Ministry has accepted the recommendations of the Committee and a draft note for Cabinet has been circulated for Inter-Ministerial consultation,” Health Minister JP Nadda stated in in a written reply in the Rajya Sabha today.
Following the announcement, cigarette stocks tanked on BSE on Tuesday. Shares of ITC, which sells every three out of four cigarettes in the country, tanked over 5% to close at Rs 355 on the bourses. Godfrey Phillips, which sells Marlboro in India, saw its shares dive close to 9% to settle at Rs 2,970 on BSE. Similarly, VST Industries fell by 0.56% on BSE on Tuesday to settle at Rs 1,859.
The Chandra-led panel, which was formed in July this year has also recommended only those aged at least 25 be allowed to buy tobacco products, against the current 18 years. These recommendations will now be put before the Cabinet and will also require a Parliament nod before they are implemented.
According to the Global Audit Tobacco Survey (covering those aged at least 15), about 35% of the respondents consumed tobacco in some form. The percentage of men consuming tobacco stood at 47%; for women, it was 20%.
The expert panel also sought for penalty for smoking in public places and the penalty shouldn't be less than Rs 200, which could go up to Rs 1,000. The penalty related to advertisement of tobacco products should be increased 10 times from the current Rs 1,000 (the first conviction), it added. Though advertisement of tobacco products through traditional media avenues is banned in India, points of sale are usually flooded with banner and poster ads of various tobacco products, especially cigarettes.
