INTRODUCTION
Patanjali, once hailed as a giant in the ayurvedic industry, surged into prominence with its wide range of FMCG products. Patanjali’s entry into the FMCG market was nothing short of revolutionary. Founded by Baba Ramdev and Acharya Balkrishna, the company leveraged its strong focus on Ayurvedic Principles to create a diverse range of products spanning from personal care to food items. Its competitive pricing and claims of natural ingredients shook the market, challenging established players like Hindustan Unilever Limited (HUL), Nestle and others. However, recent events have cast a shadow over Patanjali’s success story.
SCRUTINY ON PATANJALI AND BABA RAMDEV
As Patanjali’s advertisements became more widespread, they also attracted scrutiny from regulatory bodies and consumer organizations. In 2016, the Advertising Standards Council of India (ASCI) pulled up Patanjali for running misleading advertisements.
Ramdev is currently facing action from the Supreme Court. This is due to the publication of objectionable and misleading advertisements about their Ayurvedic products. Despite giving an undertaking to the Supreme Court in November last year to halt these advertisements, they continued to do so, leading to the court’s dissatisfaction with their actions.
President of the Indian Medical Association (IMA), Dr. R V Asokan, has voiced strong criticism against Baba Ramdev, condemning his claims of being able to cure COVID-19 while disparaging modern medicine as “stupid and bankrupt.” Asokan expressed deep concern that Ramdev’s influential status could mislead people, which he found unfortunate.
In May 2022, Patanjali received a Rs.1000 crore defamation notice from the Indian Medical Association (IMA), which termed Ramdev’s remark as a “criminal act” under IPC 499 and demanded an apology from Baba Ramdev. Following this, in August 2022, the IMA filed a petition in the Supreme Court regarding the disparaging advertisement. The Supreme Court held the first hearing on the matter in November 2023, during which it warned Patanjali against using terms like “permanent relief”.
IS THE APOLOGY BIG ENOUGH?
Ramdev has said his company has taken out newspaper ads apologizing to the public. But, On April 23, the Supreme Court questioned Patanjali Ayurved, about the scale of its published apology in newspapers compared to its typical expensive “front page” advertisements promoting herbal drugs.
Supreme Court said the apology was published in 67 newspapers. “Tens of lakhs” were spent to convey their regret for misleading the public. “But is your apology the same size as the advertisements you normally issue in newspapers? Did it not cost you ‘tens of lakhs’ to put front-page advertisements?”
On April 15, the Uttarakhand State Licensing Authority suspended the 14 manufacturing permits of Ramdev’s companies, including traditional medicines for asthma, bronchitis, and diabetes, among others. The suspension was immediate. However, on April 30, the court was dissatisfied with the inaction of the said authority in the misleading advertisement case, questioning whether they acted lawfully and urging honesty for sympathy and compassion.
GST- ANOTHER BLOW FOR PATANJALI
Also, Patanjali Foods has received a show cause notice from the Directorate General of GST Intelligence, Chandigarh, for allegedly claiming Rs. 27.5 crore in undue input tax credit.
This notice, issued under the CGST Act, highlights a potential discrepancy in the company’s tax filings that could result in penalties.
Patanjali’s journey reflects both triumphs and tribulations in the competitive FMCG landscape. While its initial success disrupted the market with Ayurvedic principles and competitive pricing, recent controversies and regulatory scrutiny have challenged its standing.
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