(Bloomberg) -- India's top court rejected a plea by cigarette makers to reduce the size of pictorial health warning on packets, dealing a blow to their efforts to boost sales.
A three-member panel headed by Chief Justice of India Dipak Misra rebuffed the tobacco industry's argument that covering 85 percent of cigarette packets with health warning will hit their business. The order reverses a direction by a lower court that had allowed cigarette makers to reduce the size.
“We are inclined to think that health of a citizen has primacy and he or she should be aware of that which can affect or deteriorate the condition of health,” the court said in its order made public late on Monday. “We may hasten to add that deterioration may be a milder word” infact it destroys health, it said.
India's tobacco industry and the government are tussling over the regulations, which require that pictorial warnings cover 85 percent of a pack's surface, up from 40 percent of just the front panel. The order could slow sales and potentially hit government revenues, since taxes constitute as much as 60 percent of the selling price of cigarettes in India.
Shares of ITC, part-owned by British American Tobacco Plc, have risen 8.3 percent in the past year, compared with a 29 percent advance for the benchmark S&P BSE Sensex index.
To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net.
To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Unni Krishnan
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