Emami dips 3% after being fined Rs 15 lakh in Fair & Handsome ads case

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Emami shares declined 2.7 per cent on Thursday and logged an intraday low of Rs 605 per share on BSE. The weakness in the stock came a day after the Central Delhi District Consumer Dispute Redressal Commission imposed a Rs 15 lakh fine on the company for its unfair trade practices in connection with its Fair and Handsome fairness cream.

 

Around 1:36 PM, Emami share price was down 2.68 per cent at Rs 605.45 per share on BSE. In comparison, the BSE Sensex was down 0.29 per cent at 81,289.46. The market capitalisation of the company stood at Rs 26,584.10 crore. The 52-week high of the stock was at Rs 859.2 per share and the 52-week low was at Rs 417.55 per share. 

 

The judgment from the Consumer Dispute Redressal Commission came 11 years after allegations that the product’s advertisement was deceptive and failed to deliver promised results.

 

In 2015 a ruling in the complainant’s favour was made but was returned for re-evaluation by the Delhi State Consumer Commission. The latest ruling comes at a time when courts and forums have intensified their scrutiny of misleading advertisements in the fast-moving consumer goods (FMCG) sector. 

 

The case started after a complaint was filed against the company on the basis that regular use of the Fair and Handsome fairness cream, as instructed on the packaging, did not lead to fairer skin as advertised. The cream, priced at Rs 79 at the time, assured results in three weeks following consistent application.

 

Emami had argued that the complainant could not conclusively prove adherence to the instructions and emphasised factors like diet, exercise, and lifestyle, which were not mentioned on the product label, as influencing outcomes.

 

Emami is an Indian FMCG company known for its diverse portfolio of personal care and healthcare products. It specialises in ayurvedic and natural formulations, offering popular brands like Navratna, Zandu, Fair and Handsome, and Kesh King. The company has been expanding its presence both in rural and urban markets, enhancing its distribution channels and leveraging digital platforms to improve customer reach.

 

In the past one year, Emami shares have gained 25.5 per cent against Sensex's rise of 17 per cent.