ITC to Close Cigarette Production from May 4 Following Apex Court’s Pictorial Warning Rule, share dropped

Kolkata: The largest cigarette making company of the country, ITC, announces to close their cigarette plants from May 4, this year. Following the warning from the federal government that asked the cigarette making companies ‘to comply with a new stipulated pictorial warnings rule,’ ITC said in an official press release that ‘until the company is in a position to comply with the interim requirements’ will not resume the same.

Following the announcement made by ITC, the leading Indian FMCG company dropped its shares by 1.02% to Rs 314.30 at 10:10 IST on BSE (Bombay Stock Exchange). The Supreme Court on Wednesday issued a notice for the cigarette companies. The notice adhered to incorporate larger health warnings on cigarette packs, assumed as a ‘major setback’ for the $11 billion industry, sources said.

“The Company has had to shut its cigarette factories from May 04, 2016 until the Company is in a position to comply with the interim requirements pending hearing in the Karnataka High Court,” ITC said after the court issued the order. Further hearing of the case will take place on Karnataka High Court. Also, other leading cigarette manufacturing companies have objected the new federal rule, as sources said.

The direction by the Apex Court on Wednesday had told tobacco makers of their ‘duty to society’ and to carry ‘pictorial warnings’ spread over 85% of both sides of their packaging as mandated by the government.