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The case filed by Pernod Ricard was straightforward and rather simple. It has been importing Jacobs Creek wines into India for over a decade. There was no change in the process and there had been no objection by the government ever. Suddenly, the importer was told that these 38 consignments received from October to December 2014 and valued at Rs. 2.5 crores (Rs. 25 million) contained Tartaric Acid and Ascorbic Acid according to the declaration on the labels, which was not permitted as an additive under the FSSAI Regulations. The case was reported in delWine.
The judgment was passed in the favour of the petitioners, Pernod Ricard. While under various other documents it does say 600 ppm (parts per million) of Tartaric Acid were allowed to be present, there was no mention in the Appendix that describes the food additives that are allowed. Pernod
Ricard rightly refused to change the labels to suit the requirements of FSSAI, to remove them from the labels, fearing that their shipments might be rejected in future for wrong declaration.
In a verdict handed down by the Honourable Bombay High Court, the petition filed by Pernod Ricard Jacobs Creek was accepted and was reported by delWine. The court had taken cognisance –including the Indian Bureau of Standards that existed before the FSSAI Act 2006 came into force. It allowed the presence of up to 10 gms/liter of Tartaric Acid
in red, white and sparkling wines. FSSAI did not even go into the issue of how much quantity was found in testing but rejected the consignment merely due to the presence of these acids.
Implicit Strictures against FSSAI
It is noteworthy that the Hon’ble High Court was so convinced about the arbitrary and unfair treatment meted out to Pernod Ricard that the judged recorded that it was a fit case in which legal costs ought to have been imposed on FSSAI in favour of Pernod. However, considering that it was a statutory authority constituted under the provisions of The Food and Safety and Standards Act, 2006 to ensure that safe and wholesome food is supplied to the consumers, they refrained from doing so.
‘Respondent No.2 (FSSAI) , being a statutory authority, cannot act in an arbitrary fashion disregarding the law under which it was constituted. We appreciate the functions and duties that Respondent No.2 undertakes to ensure the safety of food that is consumed by the public. Respondent No.2, being the watchdog for the consumer as well as a regulator of the food industry, ought not to take an adversarial approach,’ reads the judgement.
The judges found that despite Tartaric Acid and Ascorbic Acid being clearly included in the Regulations, and the fact that Jacobs Creek wines have been imported in India for over a decade without any complaint or untoward incident, FSSAI ought to have looked at the Regulations framed by them a little more carefully before refusing to give the NOC to the Petitioner. (The NOC issued by FSSAI is required to be presented to the Customs for allowing the goods to be taken out of the bonded warehouse.) The Hon’ble Court stressed that ‘it took a pragmatic view that in today’s global reality India’s borders had opened to international business. It was therefore important that the statutory authorities act in a manner that was fair, transparent and with a proper application of mind.’
Moving forward
With the case behind them and in their favour, the company is working on the next course of action-checking out the quality of the wines in the custom bonded warehouse before releasing for sale. Keeping the immense brand value of Jacobs Creek in mind, Pernod is taking each step very carefully. Even before filing the case in the High Court, they had several meetings with the FSSAI, supplying them a lot of relevant information supporting their case with various scientific data and tried to reason with them after the consignments in question were rejected. Only after there was no positive action from FSSAI for months were they obliged to go to court, says a senior executive on the condition of anonymity.
Pernod Ricard is quite protective of its sales data and information but according to the court records, ‘in the months of October to December 2014, the Petitioner imported in all 38 consignments of Jacob's Creek brand of wines valued at approximately Rs.2.5 crores. (Rs. 25 million)’. At an estimated FOB value of Rs. 150 a bottle, this works out to around 14,000 cases of wine of different varietals, equivalent to a year’s supply for many medium size importers, although it represents about 20% of the annual requirement of Pernod Ricard for the Indian market.
According to our reliable sources, the stocks are lying at Veritas, one of the best temperature controlled warehouses in Mumbai, but the company is not taking any chances before releasing these wines to the distributors. Unlike Chateau Indage which used to treat even their table wines as liquid gold, Pernod Ricard believes it has its brand and the global image to protect, says our source quoting a manager saying, ‘we want to make sure that our brand is not affected in anyway.’
To make sure that the quality is certified to sell, Bernard Hickin, chief winemaker of Jacob’s Creek, was expected to reach Mumbai last night specifically to thoroughly check the stocks before certifying and releasing them for sale. The company has also flown a few samples for testing in the labs in Australia to determine the drinkability and current quality status of these wines. After thorough checking, the company is expected to take a decision and make an official statement.
Maggi, Maggi, Maggi
Meanwhile, the Maggi ban case by FSSAI has reached another interesting phase. While the government who seems bent upon setting an example out of the MNCs , (thanks to people like Baba Ramdev, the national TV Yoga guru) is reportedly contemplating suing Nestle for a sum of Rs. 400 crores (Rs. 4 billion) for misdeclaring on its label (no MSG added), according to another media report, samples of the 2-minute noodles were approved a couple of days ago by the USFDA-one of the toughest food regulators in the world, thus becoming the seventh country to clear the quality.
Last week, the FSSAI-approved and one of the most credible food referral labs in India, Central Food Technological Research Institute (CFTRI), cleared the samples according to a report in Rediff last week. One-and-a-half months after Goa’s Food and Drugs Administration had sent five samples of Maggi noodles for re-test at the Mysore based labs, the findings show the product adheres to the requirements of the Food Safety and Standards Rules, 2011.
Earlier, FSSAI had declared the Goa FDA findings ‘questionable’, following a test of the same samples and had ordered recall of Maggi from store shelves all over the country based on results showing contamination by a few states. The Goa FDA, like CFTRI, had not found any contamination in the samples.
Expectations from the New Chairman
To an independent observer it would appear that ‘all eez not well.’ Some people believe that the problem might have been amplified because the organisation has been topless since January 2015 with no Chairman. It is anybody’s guess whether the government was woken up with the Maggi case but the recent appointment of Mr. Ashish Bahuguna, the highly respected 1978-batch IAS officer as the new Chairman of FFSAI ought to be a welcome decision. They feel that a man like him might alleviate some of the problems-at least the expectations are that he will give them patient hearing with a positive attitude, something that all wine importers in unison say, has been lacking in the organisation full of arrogance and arbitrariness.
Technically qualified personnel
Another aspect that Mr. Bahuguna should be encouraged to consider is inducting qualified staff with domain knowledge especially in the wine sector. Any person in the organisation with a basic knowledge of wine would know that tartaric acid is present in all wines as an additive. The records submitted by Pernod would perhaps have been more comprehensive to a person who understood wine and the wine making process.
Many importers are not happy with this concept of requesting for qualified personnel. They fear that this would result in the government increasing the sampling charges and perhaps the speed money required to be paid so frequently. This is certainly not progressive thinking. When the wine meets international standards, they should have nothing to fear except the devil’s share (as compared to the Angel’s share in the oak barrel storage of whisky, wine, sherry and brandy etc) which in any case is always a variable.
PM Modi says ‘acche din aayenge’. Let us hope the Judgment at Bombay 2015 and the arrival of the new Chairman of FSSAI bode well for the food and wine industry that has been bogged down by expensive and avoidable glitches. For the present, one can only be cautiously optimistic.
Subhash Arora
For the complete judgement of the High court, click here |