Refile: UPDATE 2-India's top court tells tobacco industry packs must carry bigger warnings

VST Industries

05/05/2016 20:18

(Correct paragraph 13 to read "among the most stringent", not 
"the most stringent") 
    * India's top court grants no stay on tobacco packaging 
rules 
    * Pleas challenging new rules to be heard by a state court 
    * Tobacco industry calls new rules impractical 
    * Shares of cigarette manufacturers fall after court order 
 
    By Aditya Kalra 
    NEW DELHI, May 4 (Reuters) - India's top court told tobacco 
companies on Wednesday they must adhere to a new federal rule 
requiring much larger health warnings on cigarette packs, in a 
major setback for the $11 billion industry that opposes the new 
policy. 
    The Supreme Court turned down a plea to stay implementation 
of the new rules introduced from April 1, which require health 
warnings to cover 85 percent of a cigarette pack's surface, up 
from 20 percent earlier. 
    In a packed court room in New Delhi, a two-judge bench 
rejected the industry's plea to extend a stay it had obtained 
from a court in the southern Karnataka state but agreed to a 
request to move the rest of the appeals to the Karnataka court. 
    "You have duty towards the society," the judges told a team 
of industry lawyers, which included some of the most expensive 
advocates in the country.  
    The industry "should not violate any rule prevailing as of 
today", they said. 
    The Supreme Court also directed the high court of Karnataka 
state to hear dozens of pleas filed against the new rules in 
several Indian courts and decide on the matter within six weeks. 
    
    Shares in India's biggest cigarette maker ITC Ltd  ITC.NS , 
part-owned by British American Tobacco  BATS.L , pared gains 
after the court ruling and ended with losses of 1 percent.  
    U.S.-based Philip Morris International's  PM.N  India 
partner Godfrey Phillips  GDFR.NS  ended down marginally. 
    ITC, Godfrey and the industry lobby group Tobacco Institute 
of India did not respond to requests seeking comment. 
        
    BATTLE IN COURTS 
    The Supreme Court's ruling can leave the industry in limbo. 
It was not immediately clear whether it will start complying 
with the new rules or sell old stock while it waits for the 
Karnataka court to decide.  
    When the rules came into force last month, the industry shut 
down factories in protest for days. India's traditional 
hand-rolled cigarette makers also joined in the protest. 
    The rules were initially supposed to come into force on 
April 1, 2015 but were delayed. 
    The rules make India's health warnings on tobacco products 
among the world's most stringent, along with Thailand. Smoking 
kills more than 1 million people a year in India, according to 
BMJ Global Health. The World Health Organization says 
tobacco-related diseases cost India $16 billion annually. 
    The tobacco industry filed 27 cases against the federal rule 
in several courts around the country, according to lawyers 
involved in the case. 
    ITC has said it had obtained at least one judgment that 
allowed it to resume production with older warnings, and one 
that allowed it to sell old stock, which it then tried to use to 
circumvent the federal government's orders.  
    In a letter, dated April 26, seen by Reuters, ITC cited the 
two rulings to press a regulator who had seized its cigarette 
stock worth billions of rupees.  
    Ranjit Kumar, solicitor general of India, told the court 
that the federal government was committed to the new rules and 
opposes any stay on their implementation.    
 
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Cigarette package warnings globally    http://tmsnrt.rs/1IU5Ug4 
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 (Editing by Paritosh Bansal, Simon Cameron-Moore and Jacqueline 
Wong) 
 ((aditya.kalra@thomsonreuters.com; +91-011-49548021; Reuters 
Messaging: aditya.kalra.thomsonreuters.com@reuters.net)(Twitter: 
@adityakalra)) 
 
Keywords: INDIA TOBACCO/