CIGARETTE SMOKING - INJURIOUS TO WHOSE HEALTH?

By Ruma Dubey

Imagine the scene at the nukkad ka paan shop. Be it any time of the day, it is very common to hear, “bhaiyya, ek cigarette dena”. Probably the paanwallah sells more cigarette than paan.

The paanwallah would have had a sleepless night, post the new diktat of the Govt yesterday. It banned sale of ‘loose’ cigarette. Over 70% sales of cigarette companies across India comes from these ‘single’ cigarette and now to overnight ban them; it is sure to cause a lot of heartache.

Not surprisingly, all the cigarette stocks – ITC, VST, Godfrey Philips lost ground. They ended the day in the red and one had expected the hangover to persist and today too, the color red was expected to be its ‘color of the day’.

But thanks to two foreign funds – Morgan Stanley and UBS, the color of the day for all cigarette companies is today green. Moods have changed with both putting out a “buy” call with UBS hiking the target price to Rs.425.

What had changed overnight? Well, the foreign funds thought over and stated that though the rule evokes negative sentiment, banning sale of loose cigarettes would be very hard to implement. Just as we cannot yet implement ban of cigarette sale to those below the age of 18, this would be very hard to execute. How does one monitor every street corner paanwallah from selling loose cigarette across India? It is virtually impossible unless the company itself decides that not a single cigarette from its factory would go out for sale without packaging. Actually, cigarettes even now go packaged but it is sold loose from the packets itself. How can the Govt stop that? It cannot stop people from spitting on the road, how can this rule really come into practice? And that’s why, the stock price have risen, celebrating the inefficiencies in our system.

The cigarette industry is indeed the very symbol of hypocrisy, as we stated earlier. If smoking cigarette is so injurious to health, with health warnings interrupting all TV/film viewing, with one having to see “Mukesh ki kahani” before every movie, after the national anthem, why can’t this harmful product be completely banned? That simply cannot be done as it’s a huge contributor to the national exchequer. India’s tobacco industry’s contribution to the country’s GDP is around 1.1% or roughly represents about 7% of the total for the manufacturing sector. Tobacco, being a labor intensive crop, provides employment to more than 60 lakh people who are engaged in the farming, curing, grading, primary marketing, processing, packaging, manufacturing, distribution, and retailing activities besides exporting. Cigarette smokers pay almost 85% of the total tax revenues generated from tobacco and it is the second largest sector in terms of central excise revenue contribution after the oil.

Thus there is no way that any sane Govt will ban manufacture of tobacco, knowing fully well that its harmful. But at the same time, it creates an environment where survival for these companies, the mulch cows for the Govt to function with persistent excise duty hikes in every Budget, almost like a ritual. And then retrograde steps like warnings during films and now this ban of yesterday. Everyone who smokes, knows fully well that it is cancerous, just as they know the perils of driving too fast or drinking alcohol. But trying to discourage smokers while making money from these very companies, smacks of downright sanctimoniousness.

Well, the height of two-facedness – ITC and Godfrey Phillips India have put up 'no smoking' boards across all their offices, removed ash trays; their own offices are non-smoking.

The existence of cigarette companies is like the evils of our life – they will continue to exist otherwise we will not know the presence of good. Anything which is banned immediately becomes attractive; that’s how human psyche works. Thus cigarette companies will continue to make profits as many smoke their health away to cancer while the Govt plays devil’s advocate.

So ethically or morally, should one buy cigarette stocks? Now that’s a person choice – just as whether you decide to smoke or not.