24 October, 2020

Breather For Choked Lungs

Driven by taxmen and derided by health lobbies, cigarette-makers head northeast for survival

Breather For Choked Lungs
outlookindia.com
-0001-11-30T00:00:00+05:53

When tobacco giant ITC announced a Rs 525-crore investment plan for cigarette production in Assam, the reason seemed logical. After all, the market leader, reeling under the dual impact of dwindling sales and increased pressure from the who and World Bank on tobacco-related health issues, was desperately seeking a platform to escape the excise dragnet and gain marketshare with a low-priced product. But ironically enough, the thought process is not confined to the precincts of Virginia House - the Calcutta headquarters of itc - but other cigarette majors like Godfrey Phillips India (gpi) and the Indonesian giant Gudang Garam Tabak. All have pushed in applications for manufacturing cigarettes in the northeastern tax haven, little realising that India's annual demand is 100 billion sticks while applications total 180 billion.

The proposed relocation may not cure all ills. Tobacco majors will do well to remember the failed Sikkim experiment.

Insiders claim the Rs 27,276-crore tobacco industry - of which cigarette accounts for Rs 10,500 crore - is passing through its...

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