Beedi prices may go up 10-15%

The price of beedis could go up by Rs 2 a pack, as beedi-makers would try to recover higher packaging costs to abide by the Supreme Court order, which requires them to carry pictorial warning on tobacco products from May 31.

Raji Reddy, a beedi-maker from Vemulawada in Karimnagar district of Andhra Pradesh, said the price of beedi could go up by about Rs 2 per pack. Depending on the quality and brand, a pack of 25 beedis is presently priced between Rs 5 and Rs 9.

“The packaging cost is likely to increase by 30 per cent, taking into account the expenses of multi-colour printing and hence, the price of beedi is likely to go up by 10 to 15 per cent,” said Rajesh Mirani, a beedi manufacturer in Chhattisgarh.

 

Beedi-makers in Tamil Nadu, however, said though the cost of printing would go up marginally, it should not have an impact on retail prices of beedi. The makers will also have to junk existing stocks of packaging material. To save costs, some manufacturers have decided to put stickers of pictorial warnings till they can clear old stocks.

‘‘The packing bill runs into several lakhs. Orders are placed in advance based on daily production. All the packing material will have to be discarded as waste. The thin paper and oil printing used for packing makes it difficult to reprint the paper,’’ said D Lakshman, maker of HP brand of beedis in AP’s Karimnagar district. Beedi-makers can’t do much about the stock that has already been circulated in the market for the next 20 days.

“We can implement the new norms on the product rolling out from May 31,” said Ashok Sharma, a beedi-maker in Chhattisgarh.

The norms also pose challenges for branding and display. “The packaging of beedis is in conical form and since principal display area will be used for the pictorial and other specific health warnings, not much space will be left to properly display the brand name and trademark of beedis,” said Mirani.

The bigger worry is demand. Reddy fears that consumption, and hence demand for beedis could fall by 50 per cent, which would force the beedi-makers to cut back production. They are anticipating a significant fall in the consumption of tobacco products when the skull and bones symbol is conspicuous.

Beedi-making units in AP’s Karimnagar district are planning to take a production break for a week starting May 24 to align production with stocks of packaging material. This would give them a window to get new packing material printed and to consume the stocks of already printed material.

Ordering fresh packaging material is not viable at this point of time. The idea is to ensure they exhaust the old packaging material by matching the production to it.

(Additional reporting by TE Narasimhan)