Home / Companies / Ramdev alleges MNC plot against Patanjali Ayurved

New Delhi: Yoga guru Baba Ramdev alleged on Monday that the local units of multinational packaged consumer goods makers had ganged up against his company Patanjali Ayurved Ltd, which makes packaged foods and personal care products, and said they were hatching a plot to hurt its business.

Ramdev didn’t offer any evidence to back the allegation, which he aired at a press conference in New Delhi.

He named Hindustan Unilever Ltd, Colgate-Palmolive (India) Ltd and Nestle India Ltd as being party to the alleged plot against Patanjali, which he said had emerged as a threat to the multinational corporations or MNCs.

“Why is Patanjali being targeted? In the FMCG space, MNCs grow at a rate of 4-5%. Patanjali has been growing at 150% per annum… And this way, Patanjali would put these MNCs into the crisis zone in just 3-5 years," said Ramdev.

FMCG is short for fast-moving consumer goods.

“Whenever any Indian company started growing big, MNCs have either bought them or killed them in the market. They can’t do any of the two with Patanjali," said Ramdev.

Asked about Ramdev’s allegation, a Nestle India spokesperson said, “This allegation is incorrect and we do not wish to comment any further on this."

A spokesperson for Hindustan Unilever declined to comment on the issue. Colgate-Palmolive did not respond to an e-mailed request seeking comment.

Ramdev’s Patanjali entered the consumer products business in 2006. According to Ramdev, Patanjali will close the current fiscal year with revenue of 5,000 crore, up from 2,000 crore last year.

Patanjali sells 30 products, including mustard oil, flour, butter, biscuits, spices, oil, sugar, juices, honey and toothpaste at prices that are 15-30% lower than those of its competitors.

It has set aside 360 crore for advertising between November and March as the company seeks to establish itself as a serious contender in the country’s estimated 3.2 trillion packaged goods market, Mint reported on 3 December.

An IIFL Institutional Equities report said Patanjali was targeting a 2.5 times increase in sales in FY16 over the previous year, Mint reported on 12 January. The report estimated that Patanjali’s sales will increase to 20,000 crore by FY20

Analysts say Patanjali can emerge as a challenger to established packaged consumer goods companies in the long term. Securities house CLSA, in a report titled Indian Consumer: Taste of India, said Patanjali Ayurved may be the most diversified consumer goods firm in India, bigger than Jyothi Laboratories Ltd and Emami Ltd.

“While competition must be keeping its fingers crossed, all we can say is: ‘Wish you were listed’," CLSA’s Vivek Maheshwari and Bhavesh Pravin Shah wrote in the report published in August.

Patajanli products have attracted their share of controversy.

In November, the country’s food regulator Food Safety and Standards Authority of India (FSSAI) issued a show-cause notice to Patanjali for selling atta noodles without the approval of the regulator. The contract manufacturer of Patanjali atta noodles—Aakash Yog—was also questioned by FSSAI on how the noodles were being produced without a licence from FSSAI. Patanjali later replied to the FSSAI, which is studying the response, The Indian Express reported on 2 January.

Some samples of Patanjali’s brand of ghee, according to a report in The Hindu on 10 December, had been found to contain fungus. This could not be independently verified by Mint.

On Monday, Ramdev said reports of adulteration of Patanjali products were an attempt to spoil the company’s reputation. “MNCs are giving money to certain people to defame Patanjali products," he said.

“We will look at taking legal actions against institutions (companies and research laboratories) who are defaming Patanjali, we will not spare anyone doing (things) like that," said Ramdev.

According to Ramdev, Patanjali ghee already has yearly sales in excess of 1,000 crore, which will increase to 1,500 crore next year. Its honey has sales of 200-300 crore, and Kesh Kanti hair oil is projected to cross 1,000 crore in sales next year, from about 400 crore now.

Patanjali plans to increase production capacity by four times in the next couple of years by putting up three to four more factories to meet demand, said Ramdev.

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