New law on tobacco packaging deferred till 22 Nov.

The new packaging law on tobacco will be deferred till 22 November, the next date of hearing in the case filed by the Ceylon Tobacco Company Plc.

CTC said with the case being taken up in the Court of Appeal yesterday, the Deputy Solicitor General who appeared for the Ministry of Health gave an undertaking that the above would not be implemented until 22 November 2012, which is the next date of hearing.

The company on Friday went to Court challenging the Tobacco Products (Labelling and Packaging) Regulations No. 01 of 2012 published by the Minister of Health in the Government Gazette Extraordinary No 1770/15 dated 8 August 2012.

“In view of the said undertaking, the company will continue to carry on its operations as usual without having to comply with the said regulations,” CTC said in a filing to the CSE.

CT Smith Stockbrokers in a commentary said it believes that the timeframe offered may not be feasible to implement the regulation on a large scale. As per the new regulation, Sri Lanka will have to adopt pictorial health warnings on tobacco packaging, covering at least 80% of the total area of the package.

“We do not expect the move towards graphical labelling on packages to have a significant negative impact on CTC’s volumes as it is confirmed by management that 95% of sales are individual sticks. Amidst a lack of further information at this stage, amidst ongoing legal action, we maintain our profit expectations for CTC at Rs. 8,042 m for 2012E (up 22% YoY) and Rs. 8,799 m for 2013E (up 9% YoY),” CT Smith said.