GSK gets reprieve on Horlicks sale ban; HC stays Bihar govt order

Food and drug inspectors in Bihar had placed an immediate ban on sale of GSK's Horlicks in state

The Patna High Court on Thursday stayed a Bihar government order which banned the sale and manufacture of GlaxoSmithKline's Horlicks in the state with immediate effect. The top court of the state also issued notices to the Drug Inspector, Department of Health, the state Drugs Controller, the Commissioner of Food Safety, and Food Safety Standard Authority of India. It has asked the agencies to file their reply within four weeks on GSK's petition challenging the ban.

Exercising powers under the Drugs and Cosmetics Act, 1940, the Drug Inspector of Muzzafarpur had on November 17 passed an order banning the sale and manufacture of GSK's Horlicks alleging that the malt-based drink wrongly carried a green dot signifying the product was vegetarian despite containing Vitamin D3, which has been declared non-vegetarian.

In its challenge before the Patna High Court, GSK said that the food inspector had no jurisdiction to pass the order banning sale and manufacture as it could be done only by the central government. In its petition, GSK, represented by law firm Khaitan & Co, also said that their product contained Vitamin D2 and not D3 as had been alleged in the order of the food inspector. Vitamin D2, the company claimed, is a plant derivative.

GSK’s Horlicks, a malt-based drink is the market leader in the segment and enjoys around 43% market share. The company has, however, put up the brand for sale and is looking at bids from Nestle, Unilever and Reckitt Benckiser among others. Horlicks competes with Nestle’s Milo for the $ 1 billion malt-based drinks market.