Tobacco-to-cookies conglomerate ITC today made it clear that it would resume production of cigarettes only after it received the government’s notification on pictorial warnings.
The statement came in response to the government’s recent campaign to deter tobacco consumers by issuing notices to tobacco companies for clear depictions of the disastrous effects of tobacco consumption.
Cigarette making companies, according to the Ministry of Health and Family Welfare’s notice of May, had to display more severe and powerful warnings on the packs from December 1. On December 7, though, the Union Cabinet decided that the existing pictorial warnings could continue till December 2011, when the matter would be reviewed.
Tobacco comprises around 50 per cent of ITC’s total annual turnover. The FMCG business, which is new in comparison, contributes about 20 per cent.
“We have enough stocks at present to continue but might face problems later if the production shutdown continues for a long time. The sales will get affected in the longer run if the uncertainty remains for a longer period. I hope it doesn’t,” ITC Chairman Y C Deveshwar told Business Standard on the sidelines of the ITC Classmate awards in New Delhi.
ITC’s education and stationery brand, Classmate, had launched a nation-wide competition – the ITC Classmate Ideas for India Challenge — three months back, inviting ideas from the youth across the country to contribute in making a better India tomorrow.
The company says it will resume cigarette production only when it is made clear as to what kind of pictorial warnings does the government expect the companies to display on cigarette covers. Till now, it says, the information is uncertain and unclear.
The company, in the meantime, is focusing on four business verticals for the next five years: FMCG, information technology, agri-business and hotels. It plans to invest Rs 25,000 crore in these verticals in the next five-seven years.