Som Distilleries and Breweries shares tank 16% amid child labour concerns, company issues clarification

Som Distilleries and Breweries shares plummeted 16% after NCPCR found child labour issues. The company clarified that the concerns were related to an associate company, not the listed one.

Pranati Deva
First Published18 Jun 2024, 12:30 PM IST
Som Distilleries and Breweries shares plummeted 16% after NCPCR found child labour issues. The company clarified that the concerns were related to an associate company, not the listed one.
Som Distilleries and Breweries shares plummeted 16% after NCPCR found child labour issues. The company clarified that the concerns were related to an associate company, not the listed one.(Unsplash/Dylan de Jonge)

Som Distilleries and Breweries shares plummeted 16 percent on Tuesday, June 18, after the National Commission for Protection of Child Rights (NCPCR) found over 50 children working at its Madhya Pradesh plant. The NCPCR chairperson revealed that over 50 children, including 20 young girls, suffered skin burns from chemical exposure. The commission has filed a case against the firm under juvenile justice and bonded labour laws.

Issuing a clarification against the news concerning child labour issues at the company, it said, “These concerns are not related to Som Distilleries and Breweries Limited but relate to our associate Private Limited company which deals in country liquor primarily, and not the listed company as reported.”

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"Also we wanted to clarify that labour for the associate company is supplied by contractors. It may be the fault of the contractors who may not have got proper age verification done of the workers being allowed to work at that company. That company has extended full cooperation to the authorities regarding the issue and have terminated the services of the vendor through the directors of that company. We want to assure you that all the plants of our company are fully compliant with all applicable laws and have all the necessary permissions," it stated in the exchange filing.

The stock fell as much as 15.8 percent to its intraday low of 105. It is now almost 33 percent away from its record high of 155.92, hit on October 5, 2023. Meanwhile, it is still up over 24 percent from its 52-week low of 84.52, hit on February 14, 2024.

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The liquor stock has gained 27 percent in the last 1 year and has been almost flat, up just 2 percent, in 2024 YTD. The scrip fell over 9 percent in June so far after a 0.3 percent and 21 percent rise in May and April, respectively. However, the stock was in the red in the first 3 months of the calendar year, down 4 percent in March, 1.1 percent in February and 2.6 percent in January.

Post the news of the child labour issues, the Madhya Pradesh Chief Minister’s Office said on the social media platform X (formerly Twitter), “The case of child labour during a raid on a factory in Raisen district has come to my notice. This matter is very serious. In this regard, detailed information has been obtained from the officials of Labor, Excise and Police departments and instructions have been given for appropriate action. Strictest action will be taken against the culprits.

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$5 M

394,000

$112 B

12.1%

₹133.50 Cr

₹12,300 Cr

$136 M

First Published:18 Jun 2024, 12:30 PM IST
HomeMarketsStock MarketsSom Distilleries and Breweries shares tank 16% amid child labour concerns, company issues clarification

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