Patanjali Issued Notice By Government For Misleading Ads

Ramdev Baba‘s Patanjali Ayurved has landed itself in trouble. The Supreme Court (SC) issued a contempt of court notice to the brand and its Director Acharya Balkrishna last week. The brand continued to run misleading advertisements that claimed to permanently cure several diseases.

Saying that the entire country has been “taken for a ride”, the top court banned Patanjali from running medical ads temporarily. Patanjali Ayurveda allegedly flouted an undertaking given to the court not to come out with any advertisement about its drugs and to desist from making statements against “any system of medicine”.

The bench of Justices Hima Kohli and Ahsanuddin Amanullah also restrained the company from advertising or branding products made by it for treating diseases/conditions as laid down in Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954, and the rules framed under it.

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What Transpired

The Supreme Court first heard the petition by the Indian Medical Association (IMA) last year alleging a smear campaign by Ramdev against the vaccination drive and modern medicines. It then ordered Patanjali to cease all its false and misleading ads. The apex court even said that any violation would result in an imposition of up to Rs 1 crore on every product for which a false claim is made regarding its ability to cure a disease.

Patanjali had then assured the Supreme Court that it would not make statements against any system of medicine, or regarding the medical efficacy of Patanjali products. However, it continued to run such advertisements. Hence, the SC issued contempt of court notices against Patanjali Ayurved. It has also banned the company from running advertisements of products claiming to cure such diseases.

The Supreme Court also blamed the Union government for “sitting with its eyes shut” and not taking any action on the advertisements. “This is very unfortunate. The government will have to take some immediate action,” said the court. The matter will be next heard on March 15.

Effect On Patanjali Foods

The share prices of Patanjali Foods, an FMCG company, fell by around 4% on the morning after the hearing. This was due to the contempt notice issued by the Supreme Court to Patanjali Ayurved. However, the company claimed that its business operations and financial performance would not be impacted by the court’s observations. Incidentally, Patanjali Ayurved holds a 32% stake in Patanjali Foods.

“The observations of the Supreme Court of India do not relate to Patanjali Foods Ltd (PFL), which is an independent listed entity and operates in the space of edible oil and food FMCG products only. The observations do not have any bearing on the regular business operations or the financial performance of Patanjali Foods,” the company explained.

Let’s wait and watch what the final verdict says on March 15.