Vishal Mega Mart , through its subsidiary Airplaza Retail Holdings Private Limited, has been fined Rs 3.00 lakh by the Additional District Magistrate Court in Cuttack for alleged violations of the Food Safety and Standards Act, 2006.

Inspection and Penalty Details

The penalty resulted from an inspection conducted by a Food Safety Officer on May 29, 2023, at the subsidiary's store. During the inspection, samples of various food products were collected from the premises. Subsequently, the Food Safety Officer filed a complaint alleging violations of the Food Safety and Standards Act, 2006.

Financial and Operational Impact

According to a disclosure made by Vishal Mega Mart under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the financial impact is limited to the penalty amount of Rs 3.00 lakh. The company stated that there is no material impact on its operations or other activities due to this order.

Recovery and Next Steps

Vishal Mega Mart has clarified that the penalty involves third-party manufactured products, and the amount will be recovered from the concerned manufacturer. The subsidiary is currently reviewing the order and evaluating its next steps.

Company's Response

Rahul Luthra, Company Secretary & Compliance Officer of Vishal Mega Mart, signed the disclosure document. The company has informed the National Stock Exchange of India Ltd. and BSE Limited about this development as part of its regulatory obligations.

This incident highlights the importance of maintaining strict quality control and compliance with food safety regulations in the retail sector. It also underscores the potential financial and reputational risks associated with such violations, even when they involve third-party products.

Vishal Mega Mart subsidiary, Airplaza Retail Holdings Private Limited, has been fined Rs 1.00 lakh by the Additional District Magistrate court in Ghaziabad for violating food safety standards. The penalty resulted from a food safety inspection conducted in February 2023, where a sampled product, 'First Crop Vermicelli', was found non-compliant with the provisions of the Food Safety and Standards Act, 2006.

Inspection and Penalty Details

The Food Safety Officer inspected the subsidiary's store on February 7, 2023, collecting samples of various food products. Analysis revealed that the 'First Crop Vermicelli' did not meet the required standards set by the Food Safety and Standards Act, 2006. Consequently, a complaint was filed before the Additional District Magistrate in Ghaziabad, resulting in the Rs 1.00 lakh penalty.

Company's Response

Vishal Mega Mart Limited, in a regulatory filing, stated that the financial impact is limited to the extent of the penalty imposed. The company emphasized that there is no material impact on its operations or other activities due to this order.

Recovery and Next Steps

The company has announced its intention to recover the penalty amount from the third-party manufacturer responsible for the non-compliant product. This approach aligns with common industry practices where retailers often seek compensation from suppliers for quality-related issues.

Airplaza Retail Holdings Private Limited is currently reviewing the court order and evaluating its next steps. This could potentially include an appeal against the penalty or implementing stricter quality control measures to prevent similar incidents in the future.

Implications for Food Safety Compliance

This incident highlights the importance of maintaining stringent quality control measures throughout the supply chain in the retail sector. It also underscores the active role of food safety authorities in enforcing compliance with established standards to ensure consumer safety.

As the retail industry faces increasing scrutiny over food safety, companies like Vishal Mega Mart and its subsidiaries may need to enhance their quality assurance processes and supplier vetting procedures to mitigate such risks in the future.