Plain Packaging on the back of Extreme 85% Warnings will Decimate Legal Cigarette Industry and Indian Cigarette Brands by further Promoting Growth of Illegal Trade

  • The Plain Packaging proposal orchestrated by foreign anti-tobacco organizations, if adopted in India, will not help reduce tobacco consumption, but will only destroy the legal Industry and Indian tobacco farmers by providing a further boost to illegal trade.
  • The main thrust of Plain Packaging will only be on the domestic legal cigarettes, which account for no more than 11% of the total tobacco consumed in India.
  • 68% of tobacco consumption in the country is produced in the unorganized sector which has no surveillance and escapes regulatory oversight.
  • Illegal cigarettes which already account for one-fifth of the Cigarette Industry does not comply with government regulations and will enjoy a huge advantage over the legal regulation-compliant domestic industry.

New Delhi, May 30, 2016: The Government has implemented 85% Pictorial Warnings in India with effect from 1st April, 2016. These excessively large warnings are Anti-Farmer and Anti-Indian Brands and will lead to unrelenting growth in smuggled International Brands into the country. Since smuggled cigarettes do not comply with tobacco control regulations of the Government, 85% Pictorial Warnings will provide encouragement to the flourishing illegal cigarette market in India.

Any proposal to implement Plain Packaging in India on the back of the extreme 85% Pictorial Warnings will be a further assault on the Intellectual Property Rights of legal manufacturers and promote the cause of smuggled foreign brands.

According to a recent Study by FICCI, illegal cigarettes already account for a huge 20.2% of the Cigarette Industry at the cost of the legal cigarette industry and resulting in a loss of Rs.9000 crore of government revenue. Smuggled international cigarettes, growing rapidly in the country, do no use Indian tobaccos posing a direct threat to the domestic tobacco demand with huge livelihood implication for 45.7 million people employed in the tobacco sector.

Smuggled cigarettes do not carry the specified Pictorial Warnings creating the impression that these cigarettes are safer than the domestic legal products that carry the warnings. The excessively large 85% warnings and any move towards Plain Packaging in the country will increase this impression and provide a huge impetus to smuggled cigarettes in the country worsening the plight of tobacco farmers.

Moreover, various surveys in Australia show no decrease in smoking prevalence after the introduction of plain packaging in the country. In fact, studies conducted post introduction of Plain Packaging in Australia have found an increase in the country’s illegal trade.

The Legal Cigarette Industry requests the Government of India to desist from moving further towards adoption of even more extreme regulation such as Plain Packaging propagated by WHO and anti-tobacco activists considering the adverse consequences of such a measure for a country like India especially when there is no compelling evidence to prove its effectiveness.

The government should recognize the vital role that tobacco plays in the Indian economy and the unique nature of tobacco consumption in India making implementation of Plain Packaging practically difficult. Tobacco is an extremely important commercial crop for India sustaining livelihood of 45.7 million people and contributing more than Rs.30,000 crores in tax revenue annually besides earning around Rs.6,000 crores in foreign exchange through tobacco exports.

India is unique in that only 11% of total tobacco is consumed in the form of legal Cigarettes. The balance 89% is consumed in other forms of tobacco consumption and illegal cigarettes. The Legal Cigarette Industry in India is in the organized sector, is licensed and is completely compliant with all tobacco control and other regulations while the bulk of tobacco consumed (68%) is largely produced in the unorganized sector which escapes regulatory oversight.

The propaganda of the foreign anti-tobacco activists towards extreme packaging regulations is motivated and unwarranted ignoring the unique Indian tobacco consumption pattern. It is a matter of concern that thoughtless and extreme tobacco control policies are being promoted by anti-tobacco activists and NGOs who are funded by overseas vested interests who have no appreciation of the millions of livelihood dependent on tobacco in the country. The relentless campaign waged by these groups is directed at influencing government policy and public opinion, regardless of the fact that it will not help reduce overall tobacco consumption in India. Ironically, USA, where these funding organizations are based, has not adopted pictorial warnings or plain packaging.

The Government and those influencing government policies should channelize their efforts towards controlling the relentless growth of smuggled cigarettes in the country and in bringing the vast unorganized tobacco sector under surveillance of regulatory authorities to ensure compliance with existing tobacco control rules. This should be a higher priority for the government rather than adoption of the excessive and extreme regulations that severely impact tobacco farmers, government’s revenue earnings and the legal cigarette industry which is the smallest segment of the tobacco industry in India.