Indian Tobacco Companies Get Restrictions on CSR and Ads

Published By : 27 Nov 2014 | Published By : QYRESEARCH

Indian tobacco companies are already in the red due to the Indian government banning the sale of loose cigarettes. The flames are set to reach higher as the government intends to put a stop to their goodwill activities involving social outreach.

The government has chalked out a new anti-tobacco legislation on Tuesday, which sent cigarette stocks plummeting. The government now plans to take it one step further and discourage the cigarette manufacturers using their legally mandated Corporate Social Responsibility activities. This could potentially stop the few remaining outlets that cigarette brands had left to earning social goodwill.

The government’s new legislation will also ban hotels, airports, and restaurants from generating designated smoking areas and extend the ban on promotion of tobacco to media platforms such as smartphones and the Internet.

The ban on designated smoking spaces though, will not extend to international airports. That is because the journey between two countries and the waiting time between connecting flights is almost always long.

The government sent a written reply to the Rajya Sabha on Tuesday, saying that the health ministry was planning to ban the sale of cigarettes in a loose manner as well as raising the legal age required to smoke cigarettes. This has sent the shares of tobacco companies crashing down.

The ITC spent a lot of money in funding CSR activities in 2013. It declined to comment on the proposed amendment. The company has been spending almost one per cent of its average net profit on CSR activities.
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