ITC, Goldfrey Phililips, Golden Tobacco Rally After Cabinet Bans E-Cigarettes

Shares of cigarette manufacturers rallied in late afternoon trade after the Cabinet approved ban on e-cigarettes. The Union Cabinet in its meeting today agreed to ban e-cigarettes in the country.

Following which shares of cigarette manufacturers climbed in trade. ITC rose 1.8%, Godfrey Phillips India rallied 7.8%, Golden Tobacoo was up 4.5% and VST Industries also gained 1%.

Previously after the advisory from the health ministry some 12 Indian states including Punjab, Maharashtra, Karnataka, Kerala, Bihar, Uttar Pradesh, Jammu & Kashmir, Himachal Pradesh, Tamil Nadu, Puducherry and Jharkhand have come out with measures to ban the use of Electronic Nicotine Delivery Systems (ENDS).

Now the cabinet has passed a decision and recognised manufacturing,production, import, export, transport, sale, distribution or advertisements of e-cigarettes a cognizable offence.

As per the draft ordinance, storing of e-cigarettes will also be punishable and one engaging in the activity may be penalised upto Rs. 50,000 or jailed for a 6 months term or both. For the violation of the new rules, first-time offenders will be charged a penalty of up to Rs. 1 lakh and may even be jailed for 1 year or both. Repeat offenders will be charged a penalty amount of up to Rs. 5 lakh or $7000 and an imprisonment for up to 3 years.

The decision to this effect i.e. banning e-cigarettes was taken as there was seen an alarming surge in vaping among young people, said the finance minister later in the press conference.

Earlier in August 2018, the health ministry released and advisory and asked all states and UTs in the country to ascertain that products which enable delivery of nicotine are not manufactured, traded, distributed, sold (that include online sales), imported and advertised. Some of these products are e-cigarettes, heat-not-burn devices, vape, e-sheesha, e-nicotine flavoured hookah, ENDS and such similar devices.

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