Indian dairy major Parag Milk Foods hit with Rs 6.14 lakh FSSAI penalty for alleged substandard products across two locations. Company contests findings but confirms product safety.
Regulatory Shock $7.3K Fine Hits Parag Milk Foods Quality

FSSAI levies Rs 6.14 lakh penalty across two states, raising questions on market surveillance and product specification compliance for a leading dairy major.

The operational landscape for large-scale Indian dairy regulation is once again under the spotlight following a significant penalty imposed on Parag Milk Foods Limited. The Food Safety Standards Authority of India (FSSAI) has penalized the prominent dairy player a total of Rs 6.14 lakh for alleged substandard products identified during routine market checks. This regulatory action, implemented under section 51 of the Food Safety and Standards Act, 2006, highlights the ongoing, strict scrutiny over product quality that affects all major manufacturers and is a key risk factor for investment.

The total penalty amount stems from two distinct cases across different operational territories. The larger financial burden, a penalty of Rs 5.00 lakh, was levied in Lunawada, while a separate penalty of Rs 1.14 lakh was imposed in Udaipur. According to the disclosure, the nature of the violation revolves around the products allegedly failing to meet standard specifications, a finding that typically arises from random sampling at retail stores rather than core production facility audits.

Crucially for both industry professionals and consumers, Parag Milk Foods maintains a firm stance that the products in question were, despite the regulatory findings, completely fit for consumption. This distinction is vital in the international dairy quality control arena, separating an issue of technical specification compliance from an immediate public health risk. The company has publicly affirmed this position, indicating a robust defense strategy against the FSSAI’s allegations.

From a business continuity perspective, the financial implications of the fine are considered limited. Parag Milk Foods has been transparent in clarifying to the market that the monetary impact is restricted solely to the penalty levied, stating definitively that there is no material impact on its operations or core business activities. Furthermore, the firm has reserved its right to file appeals against the FSSAI orders, signaling intent to vigorously contest the regulatory body’s findings at the appropriate judicial forums.

The timely disclosure of these penalties to stock exchanges, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, underscores the imperative for transparency within the regulated food sector. This event serves as a sharp reminder that as the Indian market grows, maintaining consistent and auditable product specifications is a continuous and complex challenge for manufacturers navigating a dynamic and increasingly rigorous Indian dairy regulation framework.

Source: Review the full regulatory filing on ScanX: https://scanx.trade/stock-market-news/stocks/parag-milk-foods-faces-rs-6-14-lakh-penalty-from-food-safety-authority/23750167

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