Madhya Pradesh Government Suspends Som Distilleries' License Over Child Labour Concerns
Nearly 60 children were rescued from a liquor factory in the state's Raisen district last week.
The Madhya Pradesh government suspended the license of Som Distilleries Pvt. on Wednesday due to concerns about child labour. This decision followed the rescue of over fifty children, including 20 girls, from a liquor factory in Raisen district.
Som Distilleries blamed contractors of its associate company for the child labour issues on Monday and terminated the vendor's services, and police are investigating. The associate firm, which deals in country liquor, reportedly failed to properly verify the ages of its workers.
Following a discovery by the National Commission for Protection of Child Rights (NCPCR) on Sunday, a case was filed under juvenile justice and bonded labour laws.
The child rights body will issue a notice to the Madhya Pradesh government regarding allegations of child labour in Som Distilleries. The state has not fulfilled its responsibilities properly, the NCPCR Chairperson, Priyank Kanoongo, told NDTV Profit.
SDPL has a bottling capacity of more than seven million cases per annum. It is part of the Som Group of companies, which also has Som Distilleries and Breweries Ltd., a listed firm, under its umbrella.
The brewer notified stock exchanges on Wednesday that no action has been taken by any department against the company and clarified that the child labour issues reported in the media relate to the privately held SDPL, which primarily deals in country liquor and runs under a different management.
Shares of Som Distilleries and Breweries, the makers of Hunter and Woodpecker beer, have plunged 7% in the last two days. The shares closed 0.84% lower at Rs 115.9 apiece on Wednesday, compared to a flat BSE Sensex.
The company is evaluating price hikes, expansion in Odisha capacity, and potential acquisitions as part of its future. It is working on a premiumisation strategy in different states, even as there are no immediate plans for a fresh fundraise, focusing on reducing debt and maintaining the debt-equity ratio.
Som Distilleries and Breweries has started dispatches to newer states like Rajasthan, Jharkhand, and Uttar Pradesh, with the aim of increasing market share in these states over the next two to three years.
