Subhiksha gets stay against FDA suspension

Food and grocery retailer Subhiksha has obtained a stay against the orders of the Maharashtra Food and Drug Administration (FDA) on the suspension of its warehousing licences in Bhiwandi, on the outskirts of Mumbai, and cancellation of licences of three packagers supplying to Subhiksha in Mumbai.

A special sitting of Bombay High Court bench passed the orders on Friday.

"The FDA order was supposed to come into effect on August 20. Before that, we got a stay from the high court,'' said R Subramanian, managing director of Subhiksha.

FDA officials raided the Subhiksha facilities in Bhiwandi last month and found some randomly checked samples 'adulterated' as per the Prevention of Food Adulteration Act & Rules (PFA Act) 1954 & 55, Prevention of Food Adulteration Rules, 1962 and related rules for packaging food and drug products.

Based on this, the FDA suspended the two trading licenses of Subhiksha Trading Services, Bhiwandi for ten days. Subhiksha appealed to the FDA against the decision. The FDA Commissioner, who heard the appeal on August 12, increased the suspension by another ten days.

Moreover, the regulator cancelled the licences of three packaging companies, Intuitive Software Design, Quandrangle Trading Services and Analogue Financial Services for violating the packaging rules. The FDA also initiated prosecution proceedings against the company in the local Bhiwandi court.

Subhiksha, which has 1000 stores across the country and about 200 in Maharashtra, said last week that it was being unfairly targeted by the Maharashtra FDA. The regulator was initiating enquiries and hygiene checks on grounds that the retailer was selling repackaged goods.

"We belive there is no lapse on our part. Somebody's pressure has led to the current situation. The action is not correct and not based on law," Subramanian said.

But FDA officials believed otherwise. "We acted as per the rules and the FDA Commissioner has increased suspension of the license period for ten more days to allow them comply with the rules," said a top FDA official.

Subhiksha, which follows a low price strategy to boost its sales and offers 10 per cent discount on drugs sold at its pharmacies, was earlier boycotted by the drug traders, All India Organisation of Chemists and Druggists (AIOCD) for not toeing their line. There were also regulatory issues with the state FDA in the past.