Govt disallows ads on mobile, Internet for tobacco companies; ITC slips over 1%

NEW DELHI: ITC which has the highest weightage in the Sensex slipped as much as 2.1 per cent in trade on Thursday, as the government plans to bar tobacco companies from using their social outreach activities to earn goodwill.

Tobacco companies were already in the frying pan because of an impending ban on the sale of loose cigarettes. The move will discourage manufacturers from "earning goodwill" through their legally mandated Corporate Social Responsibility ( CSR) activities, officials familiar with its drafting have told ET.

At 09:45 a.m.; ITC was trading 1.2 per cent lower at Rs 358.70. It hit a low of Rs 355.60 and a high of Rs 364 in trade today.

Turning the screws further, the government's new legislation will also disallow restaurants, hotels and airports from creating designated smoking areas and extend the ban on tobacco promotion to media platforms such as mobile phones and the Internet, added the report.

The ban on designated smoking spaces, however, will not extend to international airports as the journey between two countries and the waiting time in between connecting flights is usually long.