ITC Ltd. announced its withdrawal from all sports sponsorship irrespective of the legal position on the subject. Although the company has a long term arrangement in respect of sponsorship of various sports, specially cricket, it has already initiated action to exit from such arrangements and hopes to complete the withdrawal latest by April 1, 2001.
The move by the Rs 9,000 crore tobacco giant came as a surprise as the government's proposed bill to ban smoking in public places, advertisements by the tobacco companies and sale of cigarette to those below 18 years is yet to be introduced in Parliament.
The company has expressed grave concern at the unfair advantage enjoyed by foreign brands which gain entry into Indian homes through sponsorships of sports events telecast by satellite television channels from foreign venues.
Meanwhile, rumours have started doing the rounds that the planned India-Australia series would come face problems following the ban on sponsors like ITC. The company was expected to be one of the major sponsors. ITC has a two-year contract for sporting its logo on the dress of the Indian cricket team. This would also be withdrawn. Such moves will without doubt erode the revenues of sports boards like BCCI.