India’s largest cigarette maker is ready to foray into electronic cigarettes and has engaged with the government to come out with a policy framework to launch them, chairman YC Deveshwar said.
It has already developed its e cigarette portfolio. Deveshwar said he expects the new government would look favourably into the e-cigarette space. “We are ready with e-cigarettes. However, some people want to ban it in India,” Deveshwar said on Wednesday, adding that by the time it is established that e-cigarettes are less harmful than traditional cigarettes, foreign brands will swamp the market and Indian companies will lose out.
Their cigarette sales have been strained due to recurrent tax hikes by the Centre and state governments and prices have increased by 10-15% successively for the past three years.
E-cigarettes are battery-operated designed to deliver liquid nicotine, flavour and other chemicals by turning chemicals, including highly addictive nicotine, into an aerosol that is inhaled by the user, according to the US Food and Drug Administration. E-cigarettes have not been fully studied and their potential risks are not known, the FDA said.
Analysts estimate cigarette prices will rise 10-15% this year, too, after tax increases of up to 72% were proposed in the Budget. The Kolkata-based firm has diversified and in 2013-14, almost 59% of its net segment revenue was generated from businesses other than traditional cigarettes.
They plans to soon enter e cigarette categories such as fruit juice, tea, coffee, chocolates and dairy products. “As part of our plan to become India’s largest FMCG company by 2030, we would enter into every possible FMCG segment sooner or later,” Deveshwar said.
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