Som Distilleries' License Cancelled Over Child Labour Allegations

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Synopsis:

Madhya Pradesh Excise Department has suspended the licence of Som Distilleries after 59 children were rescued from its Bhopal unit. The company is facing severe child labour allegations over the issue. The firm blames private contractors while an investigation is ongoing.

Som Distilleries News Today

The Madhya Pradesh Excise Department has suspended the license of Som Distilleries and Breweries after reports of child labour at its Bhopal unit emerged earlier this week.

Authorities conducted a rescue operation, freeing 39 underage boys and 20 underage girls from the liquor factory in Raisen District.

Details of Rescue Operation

The operation revealed that a unit of Som Distilleries employed the minors without proper police verification.

As a result, the factory's licence has been suspended for 20 days or until the Labour Department approves resumption, whichever comes later.

Explore:Som Dist & Brew Ltd Share Price

Company’s Response

In an exchange filing on June 19, Som Distilleries clarified that the concerns pertain to a private limited company associated with the listed entity, primarily dealing in country liquor.

The company stated that contractors might have failed to adequately verify the workers' ages. They ensure that all their plants comply with applicable laws and possess the necessary permissions.

Operational Details

Som Distilleries' Bhopal plant has a significant capacity, producing 15.2 million cases of beer and 0.6 million cases of Indian Made Foreign Liquor annually, catering to regions including Rajasthan, Jharkhand, and Uttar Pradesh.

Despite these capacities, the plant's utilisation was at 70% as of the March quarter.

Market Impact

The allegations and subsequent licence suspension have adversely affected Som Distilleries' market performance, with media reports indicating a sharp decline in the company's share value following the investigation announcement.

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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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