CHENNAI: ITC Ltd, the cigarettes-to-shampoo company, said tobacco regulation should not be discriminatory to the cigarette industry while asserting that the FMCG major has no plans to exit the segment despite its ongoing diversification.
The Kolkata-based firm said taxes on cigarettes have “increased by more than 200 per cent in the past few years”, resulting in smuggling of cigarettes and other forms of tobacco.
“If you look at the figures of tobacco consumption in India, over a long period it has not gone down. Tobacco consumption has only increased,” ITC CEO & Executive Director Sanjiv Puri said on Tuesday.
From cigarettes, it has shifted to illegal cigarettes or to other forms of consumptions, he added. “Legal industry has lost volumes to illicit trade... I think that’s the concern we have and we really say that regulation should not be discriminatory to the cigarette industry,” Puri said.
When asked if the company, which is on a diversification drive into new areas, could exit the cigarettes segment considering the overall challenges in terms of regulations and health issues, Puri replied in the negative.
ITC is also investing in physical infrastructure, manufacturing capabilities and digital technologies across its non- tobacco businesses.
“We have, for sure taken the path of diversification over a period of time but we believe it is neither in our stakeholders’ interest nor in the interest of the nation, for us to cede ground to the illicit trade, to smuggling, which has become a big menace in the country,” Puri said.
At present, the cigarette industry is 11 per cent of the total tobacco consumption and accounts for 87 per cent of revenues, he added.
The company has also lined up an investment of Rs 25,000 crore in 65 projects, including 20 integrated factories for consumer goods with logistics facilities, covering an area of 28 million sq. ft across the country. Of these, three units will be operational this year, and four more over the next one year.
ITC’s future plan
It has an investment plan of H25,000 crore in 65 projects.
The “create the new ITC” strategy is part of the Kolkata-based company’s plan to reach H1 lakh crore in revenue from its non- cigarette business by 2030.