VST Industries – “In 2019-20, legal cigarette industry volumes were largely stable. However, the industry continues to face taxation challenges. The industry witnessed another round of tax increase in the Union Budget presented in February 2020. Non-duty-paid cigarettes have benefited from the large price distortion arising from exponential tax hikes in the recent past, adversely affecting legal players and government revenues. Also, harsher regulations such as selling restrictions and ban on the sale of loose sticks in key large states continue to pose challenges.”

ITC Limited – “The Cigarettes Business consolidated its market standing during the year through continued focus on delivering world-class products along with best-in-class execution. However, persistent weakness in the demand environment coupled with growth in illicit cigarette trade weighed on performance. The steep increase in taxes w.e.f. 1st February 2020 and disruptions in operations in March 2020 exacerbated the situation.

Punitive and discriminatory taxation and regulatory regime along with a sharp increase in illegal trade in recent years, especially at the premium end, continue to pose significant challenges to the legal cigarette industry in the country

Key market interventions during the year include the launch of innovative and differentiated offerings at the premium end such as Gold Flake Indie Mint & Gold Flake Luxury and the extension of Gold Flake Neo and Classic Rich & Smooth to other markets. The Business also deployed focused offers under the ‘American Club’, ‘Wave’, ‘Player’s Gold Leaf’, ‘Pall Mall’, ‘Navy Cut’, and ‘Flake’ trademarks in strategic markets towards bolstering and strengthening its market standing.”