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Beedi makers stop production over large pictorial warnings; loss worth Rs 200 cr anticipated

New Delhi: Beedi manufacturers across India on Thursday joined cigarette makers in stopping production, saying it's "not possible to print" warnings covering 85 per cent of packets as required under a new government rule.

All India Beedi Industry Federation, a body of over 240 manufacturers controlling over two-third of total branded beedi production, said the loss due to stopping production will be around Rs 200 crore daily.

"We are supporting the cigarette industry on this issue. The shutting down of beedi production meant for the domestic market will lead to a daily loss of Rs 200 crore," AIBIF Member Arjun Khanna told PTI.

Representational image. Reuters

Representational image. Reuters

A notification by the Health Ministry on 24 September, 2015, for implementation of the Cigarettes and other Tobacco Products (Packaging and Labeling) Amendment Rules, 2014, came into force on 1 April, 2016. These prescribe larger pictorial warnings, covering 85 per cent of packets on tobacco products.

"As per the notification, beedis cannot be produced without this new enhanced pictorial warning from 1 April, 2016... It is not possible to print the the curved area and wrapping paper edges prevent printing on a reasonably large area of the curved surface," AIBIF said.

The practical impossibility implies that the beedi industry cannot implement the new warning rules in its present form, the federation added.

"Therefore it is not possible to produce beedis without violating the law. Being a law abiding industry, there is no option but to stop production," it said.

The overall beedi industry in India is estimated to be around Rs 7,000 crore to Rs 7,500 crore, with members of AIBIF members contributing around Rs 5,000 crore.

Main beedi manufacturers include Pataka Industries, Prabhudas Kishoredas Tobacco Products and Desai Brothers.

AIBIF further said this being a traditional industry it cannot be closed down overnight and "the government has been
indifferent to the plight of the beedi industry, despite repeated representations from various stakeholders".

It claimed that "all the workers, mainly women in rural areas, engaged by the Industry have been rendered jobless overnight".

Last week, major cigarettes manufactures including ITC, Godfrey Philips and VST have decided to shut all their factories and stop manufacturing in the wake of larger pictorial warnings covering 85 per cent of the packaging space coming into force.

The companies, which are members of Tobacco Institute of India, accounting for more than 98 per cent of the country's domestic sales of duty paid cigarettes, had claimed the estimated production revenue loss of over Rs 350 crore per day for the tobacco product manufacturers.

They had insisted that there was ambiguity on the policy related to revision of Graphic Health Warnings on tobacco product packs as mandated by the health ministry.

Updated Date: Apr 07, 2016 21:55 PM

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