Relief for PepsiCo: Pune unit licence suspension quashed | mumbai | Hindustan Times
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Relief for PepsiCo: Pune unit licence suspension quashed

mumbai Updated: Dec 25, 2010 00:37 IST
HT Correspondent
HT Correspondent
Hindustan Times
PepsiCo India

In a partial relief to PepsiCo India, the Bombay high court has set aside the suspension of the company's licence for two days for violating provisions of the Prevention of Food Adulteration Act (PFA), 1954.

While remitting the matter back to the appellate authority of the Food and Drug Administration (FDA), a division bench of chief justice Mohit Shah and justice DY Chandrachud has asked them to give a hearing and decide within three months whether the company had violated provisions of the PFA Act.

The court also asked the appellate body to consider if PepsiCo would produce any fresh material in their defence.

On October 7, 2008, the food inspector of the FDA, Pune, received a complaint regarding infection of larvae in “oats breakfast special” manufactured by PepsiCo. After inspection, the FDA sent a show-cause notice and suspended the company’s licence for two days on June 11, 2009. The company challenged the action before the high court, after the appellate officer at FDA rejected its appeal.

The FDA’s notice alleged that the company used raw materials beyond the ‘best before’ date. Also, the packaging area in the factory was not clean and some tiles in the production area were broken where dirt had accumulated.

PepsiCo replied: “During inspection, the lines were under cleaning process as part of sanitation, hence dirt accumulation was observed during the visit… Post-sanitation line will be audited by quality control department and will be cleared for production.”

Claiming that they have been manufacturing potato chips and other food products in a state-of-the-art manufacturing facility, PepsiCo said that their annual turnover in Maharashtra is more than Rs 90 crore and they pay taxes of Rs 9 crore.

Besides, the facility provides employment to 335 regular employees, about 580 contract workmen and indirect employment to associated services for around 500 people and 3,600 farmers who grow potatoes.

Janak Dwarkadas, counsel for PepsiCo, argued that the authorities did not consider that the ‘best before’ date is not akin to expiry date and that the product may still be “perfectly satisfactory”. He argued that their licence was suspended without sending any sample of the raw material (spinach powder/besan or finished product) for analysis to the Central Food Laboratory.

“Without getting any such analysis, it is not open to the FDA to hold that the sample has decomposed or that the sample is fit or unfit for analysis,” he said.