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Noncompliance Displayed by Pakistan’s Local Cigarette Manufacturers

Islamabad- In order to spread awareness regarding the risks of smoking cigarettes, the Ministry of Health issued an order to increase the size of the pictorial warnings on cigarette packs. But, according to a recently conducted market survey, it has been identified that majority of the brands of local cigarette manufacturers in Pakistan are still non-compliant with the latest Pictorial Health Warning law, and are still selling the old packs.

The Ministry of Health issued SRO. 127 and 128 (KE)/2017, which clearly stated that the newly prescribed pictorial health warning shall cover at least 50% of the front side and 50% of the backside of cigarette packets, effective immediately from the first day of June 2018, and the retailers were given a time period of 60 days to clear the old stock.

The penalties for non-compliance consist of a fine that may extend to 10,000 rupees, or could also lead to imprisonment for a term which may extend to 2 years.

Over the years, multiple laws have been proposed by the MoNHSR&C and enacted by the Government of Pakistan, to ensure that the country’s health agenda stays on the right path. However, local manufacturers have made sure to not comply, executing multiple marketing activities that violate the laws set by the Ministry of Health. For example, giving cash discounts or prizes, free cigarettes including multiple fancy gifts like motorcycles, mobile phones, umrah tickets, etc. to consumers.

There are over 40 manufacturers, currently selling more than 200 brands of cigarettes in Pakistan; 02 multinationals, and local manufacturers’ units based in Khyber Pakhtunkhwa (KPK) and Azad Jammu and Kashmir (AJ&K) areas.

These local manufacturers operating from KPK and AJ&K areas make up the illicit cigarette sector in the country, comprising of local tax evaded products and smuggled cigarettes, and this illicit sector are also known to be involved in fiscal violations.

The minimum price per pack set by the Government of Pakistan in the Fiscal Budget 2018 – 2019 is Rs. 48 per pack.

The legitimate industry comprising of 02 multinationals is selling at a price that is higher than the designated price, while the illicit sector is openly selling cigarettes at Rs. 15–30 per pack.

The Ministry of Health has been requested to strengthen their enforcement on current laws, and to initiate awareness drives to educate the masses about the prevalent laws, in order to ensure compliance.

Furthermore, along with MoNHSR&C, Federal Board of Revenue (FBR) also needs to strengthen their grip over these matters and get the local manufacturers to pay taxes and take the country’s health agenda into consideration.

September 6, 2018

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