Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

India's ITC says to resume cigarette production amid health warning row

Published 16/04/2016, 12:49
© Reuters. A man talk on his mobile phone as he walks past an ITC office building in Kolkata
BATS
-
ITC
-

NEW DELHI (Reuters) - India's biggest cigarette maker ITC Ltd (NS:ITC) said it would resume production at its factories "consequent upon" a favourable court order, two weeks after it decided to shutter its plants over the government's stringent new packaging rules.

India ordered that from April 1, 85 percent of a cigarette pack's surface had to be covered in health warnings, up from 20 percent, but cigarette firms halted production saying the policy was not clear.

India's $11 billion (£7.7 billion) tobacco industry is up in arms against the new rules and has taken the government to court. Industry estimates show the production halt has already cost $850 million and risks the livelihood of millions of farmers.

In a statement to the Indian stock exchange late on Friday, ITC, part-owned by British American Tobacco (L:BATS), said: "Consequent upon a high court order passed in favour of the company, the company will soon resume manufacture of cigarettes in its factories".

An ITC spokesman declined on Saturday to elaborate on ITC's statement to the stock exchange. Its statement gave no details of its court appeal or any subsequent orders.

The company also did not address whether it would print bigger health warnings on its packs. ITC said earlier this month it was not ready to print bigger, "excessive" health warnings. It also said the government was implementing new rules despite a parliamentary panel report that called for the size of the warnings to be reduced.

But the panel's report is not binding on the government, and health ministry officials have maintained that manufacturers must comply with the new rules.

Smoking kills more than 1 million people a year in India, according to BMJ Global Health. The World Health Organization says tobacco-related diseases cost the country $16 billion annually.

© Reuters. A man talk on his mobile phone as he walks past an ITC office building in Kolkata

(The story was refiled to drop the extraneous word "it" from the headline)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.