New draft law on minimum age a potential headwind for cigarette makers

Analysts view the development as negative for ITC, Godfrey Phillips and VST Inds

The central government, through the proposed Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Amendment Act, 2020, seeks to raise the minimum age limit for sale of cigarettes and tobacco products from 18 years to 21 years, and restrict their sale within 100 meters of any educational institution. 

The draft Bill, piloted by the Union health ministry, also proposes to ban sale of loose cigarettes, increase fine on smoking in restricted areas to Rs 2,000 from Rs 200, and restrict advertisement (direct and indirect) of such products for personal consumption. If