BTI British American Tobacco PLC

By Preetika Rana 

NEW DELHI -- India's Supreme Court on Wednesday ordered tobacco companies to comply with a new government rule requiring that graphic health warnings cover 85% of every cigarette pack, even as the industry pursues a legal battle against it.

Cigarette makers have filed more than two dozen lawsuits against the measure, arguing, among other things, that it infringes their trademark rights. Those lawsuits are continuing. Public-health officials say the new labels will discourage smoking in a country where tobacco-related illnesses kill a million people a year.

At the start of April, when the new rule came into force, ITC Ltd., VST Industries Ltd. and Godfrey Phillips India Ltd. halted production, in a move that antismoking activists said was aimed at pressuring the government to back down. ITC has since said it resumed manufacturing.

British American Tobacco PLC owns roughly a third of ITC and VST, while Philip Morris International Inc. owns a quarter of Godfrey Phillips India. ITC, VST and Godfrey Phillips didn't respond to requests for comment on Wednesday.

Tobacco companies "should not violate the regulation in any manner," Justice Pinaki Chandra Ghose told a packed courtroom.

"Our rule was always very clear," said K.C. Samria, joint secretary of India's Health Ministry, which ordered the larger warnings. "Now that the Supreme Court has said it, too, nobody can say there is any ambiguity on how to proceed."

Governments worldwide have ordered changes to cigarette packaging -- from mandatory graphic warnings to barring manufacturers from using their own logos -- in an attempt to curb on smoking.

Philip Morris lost a costly legal battle last year against Australia's so-called plain-packaging law which requires packs to be stripped of all branding. Several other countries, including France, Ireland and the U.K., also have approved such rules.

Philip Morris, British American Tobacco and others challenged the U.K.'s plain-packaging law; a decision is expected this month. Both companies previously challenged a 2014 European Union law that banned menthol cigarettes, required bigger warning labels and set limits on the amount of nicotine in electronic cigarettes. On Wednesday, the European Union's top court dismissed that case and upheld the law in its entirely.

Meanwhile, in India's Supreme Court on Wednesday, Arvind Datar, a lawyer for the tobacco industry, said larger health warnings, if implemented, "would leave no space for any advertising" and violated companies' trademark rights.

An attorney for public-health activists, Prashant Bhushan, said: "Every step must be taken to come down heavily on the tobacco industry."

At one point, the proceedings became so heated that Justice Ghose intervened. "There's too much smoke," he said. "The court has become smoky now."

Write to Preetika Rana at preetika.rana@wsj.com

(END) Dow Jones Newswires

May 04, 2016 11:52 ET (15:52 GMT)

British American Tobacco (NYSE:BTI)
Historical Stock Chart
From Mar 2024 to Apr 2024

British American Tobacco (NYSE:BTI)
Historical Stock Chart
From Apr 2023 to Apr 2024