Tag: India

  • India: Sale of Excess Tobacco Allowed

    India: Sale of Excess Tobacco Allowed

    Image: Tobacco Reporter archive

    India’s Ministry of Commerce and Industry has permitted the sale of excess flue-cured Virginia (FCV) tobacco via auction platforms, according to The New Indian Express.

    The orders follow Chief Minister YS Jagan Mohan Reddy’s letter to Union Minister for Commerce and Industry Piyush Goyal requesting farmers be allowed to sell excess FCV after being negatively affected by the Mandous cyclone.

    “Of the total tobacco grown in 53,000 hectares, more than 50 percent of the area was severely damaged, due to which the farmers replanted the crop as there is no alternate crop,” Reddy wrote. “Mandous cycle caused tobacco growers to incur additional costs on the production of the crop during this year as the farmers were forced to go for replanting, which also forced the farmer to irrigate the crop during the season to save the crop. Cost of production increased heavily due to replanting, irrigation and increased labor costs.”

    FCV tobacco farmers affected by the cyclone are not in a monetary position to pay penalties for excess tobacco produced beyond authorized quantities. Reddy requested orders similar to those in Karnataka allowing the sale of excess FCV be issued to help tobacco growers in Andhra Pradesh.

  • ITC Quarterly Profit up by a Fifth

    ITC Quarterly Profit up by a Fifth

    Timon Schneider/Wirestock

    ITC of India reported profits of INR50.87 billion ($622 million) in its most recent fourth quarter, up 21.4 percent from the same period in 2022, reports Reuters.

    In a press release, the cigarettes-to-hotels conglomerate credited solid demand for cigarettes and other consumer goods.

    ITC’s revenue from operations rose about 6.6 percent to INR175.06 billion, boosted by a 14 percent jump in its cigarettes business, which includes the Classic and Gold Flake brands.

    During the quarter, ITC’s cigarette sales climbed as the broader tobacco industry stayed away from price increases due to a lower-than-expected tax increase on cigarettes in the central government’s budget.

    Sales of its nontobacco consumer goods have also improved as consumers in rural India are buying more amid easing inflation. ITC’s other consumer goods unit, which includes its foods and stationery businesses, rose 19.4 percent

    Revenue from the hotels business, meanwhile, nearly doubled as leisure and business travel picked up during the quarter.

  • Seeking Substitutes

    Seeking Substitutes

    Dholakia Tobacco is offering Indian smokeless tobacco products that are less hazardous than the country’s most commonly used varieties. Photos: Dholakia Tobacco

    Modern oral nicotine products could help Indian consumers abandon deadly local smokeless tobacco products.

    By Stefanie Rossel

    When it comes to tobacco, India holds several records: It is the world’s second-largest consumer, third-largest producer and fifth-largest exporter. Its consumption pattern is also remarkable. According to the 2016–2017 Global Adult Tobacco Survey, 266.8 million adult Indians—28.6 percent of the country’s population—use tobacco in some form.

    However, with 199.4 million consumers, the most used tobacco product is smokeless (SLT). Only 99.5 million Indians consume tobacco by smoking it. Of these, only 37.5 million smoke cigarettes. Most smokers prefer bidis—cheap, unfiltered cigarettes made of tobacco flakes wrapped in a tendu or temburni leaf that are even more hazardous to health than factory-made cigarettes.

    India has the world’s largest number of SLT users. Unfortunately, the type of SLT that prevails here does not reside on the low end of the risk continuum like other smokeless products such as Swedish snus do. A pasteurized oral tobacco with limited negative health effects, snus has helped Sweden achieve the world’s lowest smoking prevalence. Indian SLTs, by contrasts, are considered “uniquely deadly” by experts.

    Indian SLTs come in a large variety. The most commonly used variants are khaini, a mixture of tobacco and lime, and gutkha, which comprises tobacco, slaked lime, paraffin wax as well as catechu, an extract of acacia trees and crushed areca (betel) nut. Other local forms of SLTs contain mixtures of betel quid or paan masala. All are highly addictive and full of carcinogens. In addition to the typical ingredients, they can be laced with thousands of chemicals. Available for a few rupees, these SLTs are affordable for low-income groups. Like bidis, they are predominantly consumed in rural areas, where almost 70 percent of the country’s population lives. SLTs are responsible for an estimated 350,000 premature deaths annually in India.

    In line with its national health policy, India aims to reduce the number of tobacco users by 30 percent by 2025. The country closely adheres to the World Health Organization’s abolitionist guidelines, but its tobacco control measures are often contradictory. Attempts to curb tobacco use have remained limited to tax hikes on cigarettes rather than bidis and a ban on e-cigarettes and heated-tobacco products. In 2012, all states banned the manufacture, sale and distribution—but not the public use—of pre-packaged gutkha under laws that defined the product as a food. Some states extended this ban to other oral tobacco products, such as paan masala. Enforcement of these bans has been weak, however.

    In an interview with The Free Press Journal, Kiran Melkote of AHER, a harm reduction group, outlined the reasons for India’s ineffective tobacco control policy. “Many arms of the government work at cross purposes and implement policies that even on paper are in direct conflict with the WHO Framework Convention on Tobacco Control. The health ministry tries to implement awareness campaigns and maintain zero industry contact norms for its employees while the commerce ministry provides loans and support for tobacco cultivation and the finance ministry bans e-cigarettes and incentivizes bidi manufacturers. All of them generally ignore oral tobacco. The answer therefore lies in understanding that the strategies used in the developed world where the predominant form of tobacco is the cigarette may not really impact tobacco use in India. Here we have a larger population with different problems and an admitted inability to implement existing laws.”

    The success of modern oral products in Pakistan is welcome proof that they can replace the deadlier local oral tobacco.

    Samrat Chowdhery, director of the Council for Harm Reduced Alternatives

    Potential Solution

    Perhaps a look across the border might be useful. India’s neighbor Pakistan has a tobacco consumption profile similar to that of India. An estimated 10 million people use SLT, which represents more than 40 percent of the country’s total tobacco market. Recently, Pakistan has seen a remarkable development: In December, BAT announced that its modern oral nicotine brand Velo had achieved a monthly volume of more than 40 million pouches in the country, making it BAT’s third-largest market for nicotine pouches. Modern oral nicotine products consist of pre-portioned bags comprising nicotine applied to a carrier material. They are considered to be a more advanced, cleaner version of Swedish snus.

    Could Pakistan’s experience in substituting hazardous SLT products with less harmful varieties serve as a blueprint for India? “The tobacco use patterns in both nations are similar,” says Samrat Chowdhery, director of the Council for Harm Reduced Alternatives, referring to the high share of oral tobacco use. “Nicotine pouches have not been sold on scale before in the South Asian region, hence their substitution potential for the region’s tobacco users, especially the SLT users, was not known. Their success in Pakistan is welcome proof that they can replace the deadlier local oral tobacco—though whether that is indeed happening needs to be better understood.”

    Nihar Dholakia, director of next-generation products at Dholakia Tobacco, an SLT company based in Gujarat, India, has been closely monitoring the rise of the modern oral category in Pakistan. “Given that both Pakistan and India have a similar culture of using SLT products, we believe that the success of nicotine pouches in Pakistan could be replicated in India but on a much larger scale.”

    In light of the Indian government’s abolitionist strategy and the competitive structure of the local SLT segment, in which two leading companies jointly hold around 40 percent of the market, less hazardous oral products in India could encounter major hurdles, according to Chowdhery. “Nicotine pouches and snus could face opposition from the SLT lobby unless they can be made to see the business potential,” he says. “It would be a major setback if the government banned safer oral nicotine products too.”

    Issues are also likely to come up in terms of cultural heritage and consumer education. “Tobacco use, especially oral, has long been part of India’s cultural milieu, just like alcohol is in western nations,” says Chowdhery. “SLT is also available for cheap, and varieties vary across regions. While the social stigma around smoking is beginning to develop, none exists for oral products as there is no secondary harm. Educating users can be challenging given the number of users, with different cultural norms and languages such that it is difficult to design communications.”

    “In India, the avenues available for broadly educating consumers about THR and more specifically finessing that message to SLT users may be very limited,” says Dholakia. “The process seems to be largely organic, with consumers themselves becoming aware of the harmful effects and seeking alternatives. This often involved researching THR and exploring a range of reduced-risk products available. Online resources and word of mouth play a significant role in the education process. However, to make a more substantial impact, we require greater consumer advocacy as well as government initiatives to generally raise awareness.”

    We believe that the success of nicotine pouches in Pakistan could be replicated in India—but on a much larger scale.

    Nihar Dholakia, director of next-generation products at Dholakia Tobacco

    Treading New Paths

    Despite the government’s reluctance to admit safer substitutes, not all is lost for THR in India. Dholakia and other manufacturers are beginning to look at snus and nicotine pouches. With the Paz brand, his business recently launched the first Swedish-style tobacco snus brands in India. “In fact, we operate India’s first online platform for snus,” says Dholakia. “However, we face regulatory challenges, such as the requirements of an 85 percent pictorial warning of product packaging, high taxes and restrictions on advertisement and promotion. Nevertheless, despite these obstacles, we have observed a growing trend among consumers who are actively seeking reduced-risk products as a better alternative.”

    Dholakia Tobacco caters primarily to the premium SLT category. “However, considering the fact that India has over 220 million smokeless tobacco users who lack access to harm-reduced alternatives, we aspire to make our products more accessible and available to any SLT user. Therefore, we are determined to expand our reach to a broader audience in the domestic market as well through the right forms of direct-to-consumer education and word-of-mouth product awareness.”

    Indian consumers have responded positively to Dholakia’s snus products, particularly after switching from traditional chewing tobacco, cigarettes or khaini. “Many customers have reported experiencing a positive change firsthand, indicating their acceptance and awareness of the harm-reduced properties of snus products,” says Dholakia. “These are some of our future ambassadors for risk-reduced products, who will quite naturally be out there to talk with other consumers about their experiences with these new products.”

    The company also manufactures a filtered khaini brand, which has become popular in many Indian states recently. Filtered khaini is a modern version of khaini chewing tobacco that resembles western-style, portion pouch-packed snus but has a significantly different toxicological profile. “Traditional filter khaini available on the market is not less harmful than regular khaini,” clarifies Dholakia. “In fact, it can be thought of as a pulverized moist version of khaini packed in an oral pouch.”

    Dholakia’s filtered khaini brand is not the same, he insists. “The filter tobacco products we offer are different in composition when compared to traditional filter khaini and commercially available products in India currently. It can be said it is less harmful than other filter products due to the use of low-impact base ingredients, the type of quality tobacco and the novel processes as well as our advanced approach to product integrity and testing infrastructure. As far as affordability and availability is concerned, these filter products are comparable to regular chewing tobacco and khaini products. They are available in a few states and are perceived by khaini consumers as a more sophisticated version of a mainstay khaini product.”

    Dholakia Tobacco has also ventured into modern oral nicotine pouches. It was the first company in India to venture into this category. “As pioneers of modern oral nicotine pouches from India, our products are currently available only in the global markets we cater to and have not yet been launched domestically,” Dholakia says.

    “However, we are considering and working toward introducing them in India as we firmly believe that they can have a positive impact on public health in the country. We are confident that Indian consumers are ready for such a product. Accessibility, awareness, the right information, a fair regulatory framework and quality control are key factors that need to be addressed for the category. Given that India is in dire need of multiple harm-reduced products, we are committed to making them available in India.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • India Allows Sale of Excess Tobacco

    India Allows Sale of Excess Tobacco

    Photo: Tobacco Reporter archive

    The Indian government has allowed the sale of excess tobacco produced by registered and unregistered growers without penalty on auction platforms in Karnataka, reports Mint.

    “Union Minister of Commerce and Industry Shri Piyush Goyal has considered to allow the sale of the excess flue-cured Virginia (FCV) tobacco produced by registered growers and unauthorized flue-cured Virginia tobacco produced by unregistered growers without any penalty considering the low production during the 2022–2023 Karnataka crop season,” the commerce ministry said.

    Due to continuous rains in June and July of last year, total production of FCV in Karnataka was 59.78 million kg against the crop size of 100 million kg authorized by the tobacco board.

    The government’s decision not to impose penalties on the sale of excess FCV will help farmers recover monetary loss due to lower production during the season, helping growers to continue their livelihood, according to the ministry.

  • Olczak Outlines Harm Reduction

    Olczak Outlines Harm Reduction

    Jacek Olczak (Photo: PMI)

    In an address at the recent ET Global Business Summit 2023 in New Delhi, Philip Morris International CEO’s, Jacek Olczak, emphasized the need for leveraging science and technology for a better, more sustainable future, according to a PMI press release.

    Conceived in 2015, and now in its seventh edition, the Global Business Summit seeks to provide solutions to macroeconomic challenges by curating government-to-government interactions, business to government meetings, business-to-business engagements and to serve as a conduit for corporates and governments to secure investments in India from domestic and international allies.

    Held on Feb. 17-18, the New Delhi summit was attended by Indian Prime Minister Narendra Modi, along with several CEOs, policymakers and academics.

    Speaking on the theme “Sustainable economy for the greater good,” Olczak stressed how innovation has grown rapidly over the past decades with investments across a wide range of industries, including the energy and automotive sectors.

    “Science and technology integrated with a collaboration between private and public has proven to be key to identify solutions to overcome difficult challenges,” he said.

    Olczak then touched up PMI’s commitment to realizing a smoke-free future. Thanks to advances in science and technology, it is now possible to eliminate combustion and replace it with controlled heating, at much lower temperatures. At these lower temperatures, these products generate significantly lower levels of harmful compounds, according to Olczak, who also spoke about the clinical and non-clinical studies that have been conducted on PMI’s heated tobacco products.

    Drawing parallels with other industries, Olczak spoke about the need to address challenges at their source, while also working to identify safer alternatives. The harm-reduction principles underpinning the moves from wood-fuel stoves to gas-fueled stoves, and from combustion-engine vehicles to less-polluting alternatives, also apply to tobacco, according to Olczak.

    Taking the example of Japan, he noted how the introduction of heated tobacco products in that country has contributed to a decline in cigarette sales at an annual rate of 1.8 percent on average over the past few years.

    With the expanded availability of heated tobacco products, almost 35 percent of cigarettes in Japan have been replaced by heated tobacco products over the past seven years. Recent analysis has also shown a downward trend in hospitalizations for Chronic Obstructive Pulmonary Disease. Additionally, research funded by the country’s Ministry of Health and Welfare shows there is negligible adoption of these products by minors, according to PMI. “Similar dynamics are being observed in several European countries,” said Olczak.

    Olczak also spoke about how the estimated 200 million users of oral tobacco in India could be offered modern, safer oral tobacco products, like the ones available in Scandinavia.

    According to Olczak, PMI’s biggest contribution to society lies in addressing cigarette health effects. Throughout the company’s history, it has been a leading player in the cigarette market. Now, the company is intentionally leaving that behind, he said, embarking on a transformation to provide adults who would otherwise continue to smoke.

    “All that’s needed is for today’s innovative, science-based products to be matched by equally innovative policies that encourage people that smoke to switch to less harmful alternatives. This is where India can help drive positive change for the rest of the world. And as chair of the G20, it can be a prime example for emerging economies,” he opined.

    “Innovation in the tobacco industry is finally a reality,” said Olczak. “The question we must ask ourselves is this: How do we ensure that innovations are used in the service of people? In other words, how do we leverage technology, science, and innovation to accelerate public health progress and get millions of Indian smokers away from cigarettes? Given India’s history in leveraging innovative solutions to solve issues of society, I am confident that India will be a global leader in progressive tobacco policies going forward,” he concluded.

  • GPS-Based App to Launch in India

    GPS-Based App to Launch in India

    Image: PixPaf | Adobe Stock

    India’s Tobacco Control Cell will soon launch its GPS-based app “StopTobacco” that the population can use to lodge complaints of smoking in public places, reports The Hindu.

    The Cigarettes and Other Tobacco Products Act 2003 (COTPA) was initiated to reduce smoking in public places and protect nonsmokers from involuntary tobacco smoke exposure. Anyone violating the COTPA can now be turned in using the new app—users simply upload a picture of the public place where the smoker is located and the state’s anti-tobacco squad will respond to the area and issue a penalty to the violator.

    “We cannot be waiting for the police or municipal enforcing agency to be overburdened. This app will give us the opportunity to increase awareness about COTPA law and rules in public places, increase social responsibility for the citizens and impact positive health. This app draws a fine balance for awareness and enforcement,” said Vishal Rao, member of the state’s High Power Committee on Tobacco Control.

    A similar pilot system was launched in 2019, allowing COTPA violations to be lodged via email in 10 districts. It could not be implemented across the state, however, due to the pandemic.

    “After downloading the app, the photo of the public place where the violation is happening, such as a shop, bakery, hotel, school/college, bus station, railway station, playground, etc., can be clicked and uploaded. Then there will be an option to enter the district, taluk and mobile number of the complainant. The photo will reach the district tobacco control unit and be forwarded to the taluk tobacco control unit. As the app is GPS-based, the location from where the complaint has been lodged will be highlighted on the map, and the squad will rush to the spot,” said a senior official, adding that seven-member squads have been set up in every taluk to act on the complaints.

  • India Mulls Ban on Single Cigarette Sales

    India Mulls Ban on Single Cigarette Sales

    Photo: Africa Studio

    The Standing Committee of Parliament has proposed a ban on the sale of single cigarettes in India to help curb tobacco use, according to reports by DNA India and Latestly.

    The government should also implement a 75 percent goods and services tax (GST) on tobacco products in accordance with World Health Organization recommendations, according to DNA India. India currently imposes GSTs of 22 percent on bidis, 53 percent on cigarettes and 64 percent on smokeless tobacco. However, tax on tobacco goods has not increased significantly despite the GST, according to the committee.

    Smoking is prohibited in public places in the country, with those caught breaking the law facing a fine of up to INR200 ($2.41). Tobacco product advertisements are also banned.

  • ITC Reports Strong Quarter

    ITC Reports Strong Quarter

    Photo: Wirestock

    ITC of India reported continued strong performance across its business segments for the quarter that ended Sept. 30, 2022. The company’s gross revenue and EBITDA were up 27.1 percent year-one-year.

    Revenue from the cigarettes segment was up 23.3 percent over the comparable 2021 quarter, benefiting from a stable fiscal environment and authorities’ enforcement actions against the illicit tobacco trade.

    “As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade, thereby engendering domestic demand for Indian tobaccos while also mitigating loss of tax revenue to the exchequer,” ITC wrote in a statement.

    “The company continues to engage with policymakers for a framework of equitable, nondiscriminatory, pragmatic, evidence-based regulations and taxation policies that balance the economic imperatives of the country and tobacco control objectives, cognizing for the unique tobacco consumption pattern in India.”

    ITC also reported progress in the construction of a modern facility to manufacture and export nicotine and nicotine derivatives, which is carried out by the company’s wholly owned IndiVision subsidiary.

    Designed to manufacture high-purity nicotine derivatives conforming to U.S. and EU pharmacopoeia standards, the facility is expected to be commissioned by the end of the current financial year.

  • Karnataka Gears up for Selling Season

    Karnataka Gears up for Selling Season

    Photo: Tobacco Reporter archive

    Karnataka will start auctioning its flue-cured Virginia tobacco crop in October 2022, the Tobacco Board of India announced.

    The board expects a crop of approximately 64 million kg of good quality with a comparatively high share of bright grades.

    In a letter to customers, the Tobacco Board said it is promoting various sustainable tobacco production practices, including the promotion of integrated pest management, natural farming practices, NTRM-free tobacco production, fuel conservation measures and tree planting programs to ensure product integrity and compliance with buyer requirements.

    The Tobacco Board urged leaf buyers to communicate their requirements well in advance.

    “I would request you to plan your requirements for the 2022–23 Karnataka crop well in advance for timely liquidation of the produce and early conclusion of auction sales, thereby avoiding leaf quality deterioration as well as weight loss, which could be beneficial to the farmers as well as the traders,” wrote Tobacco Board Executive Director A. Sridhar Babu.

  • Cigarette Business Boosts ITC’s Quarter

    Cigarette Business Boosts ITC’s Quarter

    Photo: Wirestock

    ITC’s cigarette business delivered strong results in the second quarter of fiscal year 2022, with segment revenue and segment results up 29 percent and 30.1 percent year-on-year respectively

    In a media statement, the company said it continues to counter illicit trade and reinforce market standing by fortifying its product portfolio through innovation, premiumization across segments and enhancing product availability backed by superior on-ground execution.

    The business also continues to launch several differentiated variants to further strengthen and future-proof its product portfolio. Recent launches include Classic Connect, Gold Flake Indie Mint and Gold Flake Neo SMART Filter.

    The company said it was encouraged by the stable tobacco tax environment and actions by India’s law enforcement agencies to stamp out illicit trade.

    “As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, enables green shoots of volume recovery for the legal cigarette industry from illicit trade, thereby engendering domestic demand for Indian tobaccos, while also mitigating loss of tax revenue to the exchequer,” ITC wrote in a statement.

    The company said it continues to engage with policymakers for a framework of equitable, non-discriminatory, pragmatic, evidence-based regulations and taxation policies that balance the economic imperatives and tobacco-control objectives, while taking account of the unique tobacco consumption pattern in India, where factory-made cigarettes account for only a fraction of combustible tobacco volumes.