New Delhi: Yoga-guru-turned-businessman Baba Ramdev’s Patanjali Ayurved Ltd on Monday said its amla juice is a medicinal product and not food, like other juices sold in the market.
Consequently, its amla juice does not fall under the purview of the standards set by the country’s food regulator Food Safety and Standards Authority of India (FSSAI). “It comes under the purview of the Ministry of AYUSH. The test conducted by the Central Food Laboratory in Kolkata was done following the standards set by FSSAI. Our amla juice is a medicinal product and is safe for consumption," said a spokesperson at Patanjali Ayurved.
The Patanjali spokesperson was reacting to a report by The Economic Times saying that the canteen stores department (CSD), the retailing entity for the country’s armed forces, has suspended sales of Patanjali amla juices at all its 3,901 outlets across the country after the laboratory in Kolkata found the product unsafe for consumption.
“We have also written to the CSD explaining this. Patanjali amla juice will be back to CSD shelves soon," added the spokesperson.
A CSD spokesperson did not respond to e-mailed queries till press time.
FSSAI chief executive officer Pawan Kumar Agarwal did not respond to calls seeking comments.
In an interview to Mint on 13 April 2016, Agarwal had said that a lot of Patanjali products come under the Ministry of AYUSH and not FSSAI. He was responding to a question regarding the company selling products without FSSAI approval.
In the last one week, Patanjali has been in news for the wrong reasons. Last week, Indian Express reported that the Food and Drug Administration (FDA) of Haryana had labelled Patanjali ghee (clarified butter) “substandard and unsafe" based on tests that the department had conducted in October 2016 at the state food laboratory of FDA, Haryana.
“Contents in cow ghee are different from the ghee other companies sell. Even the standards set by FSSAI are based on available products and not cow ghee. We are the first company to bring cow ghee in commercial market. There is no standard for cow ghee. So it does not make sense," said the Patanjali spokesperson, referring to the controversy regarding its ghee brand.
Ghee and amla juice are among the most popular products sold by Patanjali. In April 2016, Ramdev had, in a press conference, said that ghee contributed to around 20% of Patanjali’s revenue.
In the year to 31 March 2016, Patanjali had claimed a revenue of Rs5,000 crore and said that it would cross Rs10,000 crore by 31 March 2017.
The company is yet to file financial details to the Registrar of Companies (RoC).
Will these controversies impact Patanjali’s business, or the brand? Analysts have different views.
Rajat Wahi, partner and head of consumer markets at consulting firm KPMG in India, said any company that expands business too fast (like Patanjali has been doing), with almost a product every week, is likely to find it difficult to maintain quality. “If it continues like this, and more questions are raised over the next few weeks, consumers, no matter how loyal they are, will start rethinking. And that would eventually impact the brand and the business," he said.
Abneesh Roy, an analyst with Edelweiss Securities Ltd, however, said that the lab that has issues with amla juice is the same lab that found Maggi (instant noodle by Nestle India Ltd) unsafe. “But all other labs found the product safe. The product (amla juice) has to be tested by independent private laboratories. Plus, it all depends on how the issue pans out and what the regulators (like FSSAI) do," he added.
On the other hand, said Roy, contribution of amla juice is very small to Patanjali’s coffers and the contribution of CSD will be even smaller. “It’s unlikely that this issue will impact the company’s business or the brand," added Roy.