FMCG companies: Buyers aware, sellers beware

economictimes.indiatimes.com:

FMCG companies navigate the inflation challenge, innovate to stay ahead of the competition and adopt an omni-channel approach to reach more buyers, they have a looming risk which they need to address. Increasingly, FMCG products are coming under buyer and regulatory scrutiny. Recently, Nestle India's shares plummeted by up to 5.4%, reaching a day’s low of Rs 2,409.55 on the BSE. This significant drop followed the revelation that the multinational FMCG giant adds sugar to baby food products sold in India, a practice not followed in Europe and the UK. This is the second time in the last nine years that Nestle India has come under the spotlight for quality issues. In 2015, its instant noodles brand Maggi was under the scanner after excess lead and MSG were found in some samples collected from Uttar Pradesh.
While stock meltdown and regulatory action are short-term risks, losing consumer trust is a long-term and bigger risk for an FMCG company. Laterly, a number of cases have come up where individuals and governments have brought FMCG products under the spotlight.

What a spate of incidents tells

FMCG products are blamed on mainly two counts: the contents of the product and the claims made by the company about the product. Patnajali had to apologise in public for making misleading claims recently. The Supreme Court had issued a notice to Patanjali Ayurveda and its managing director following a plea by the Indian Medical Association (IMA) seeking action against the company for misleading advertisements. The court