Som Distilleries Faces Licence Suspension Amid Child Labour Allegations

The Madhya Pradesh Excise Department suspended the licence of Som Distilleries and Breweries after reports of child labour emerged at its Bhopal unit. The suspension will last for 20 days or until the Labour department approves resumption of activities.

An exchange filing on June 17 disclosed that 39 boys and 20 girls, all underage, were rescued from the factory in Raisen District. The minors were employed without police verification. The company clarified that the concerns relate to a private limited company, which is an associate dealing mainly in country liquor.

Som Distilleries assured compliance with all laws, stating, "We want to assure you that all the plants of our company are fully compliant with all applicable laws and have all necessary permissions." The labour for the associate company was reportedly supplied by contractors who may have failed in proper age verification.

The Bhopal plant of Som Distilleries has an annual capacity of 15.2 million cases of beer and 0.6 million cases of Indian Made Foreign Liquor. The plant also serves regions including Rajasthan, Jharkhand, and Uttar Pradesh. According to the company's March quarter earnings call, the plant had a capacity utilisation of 70%.

Shares of Som Distilleries dropped by 6% on Tuesday and fell another 1% on Wednesday, reaching ₹115.71. This decline followed the news of the licence suspension and subsequent child labour concerns.

Despite the setback, the company noted that no department has taken action against the listed entity. They reiterated their commitment to legal compliance and obtaining necessary permissions for their operations.

First Published: Jun 19, 2024, 7:33 PM IST

Detail	Information
Initial Filing Date	June 17, 2024
Number of Rescued Boys	39
Number of Rescued Girls	20
Licence Suspension Duration	20 days or until Labour department approval
Stock Price Drop on Wednesday	₹115.71
Stock Price Drop on Tuesday	6%
Annual Beer Production Capacity	15.2 million cases
Annual Indian Made Foreign Liquor Production Capacity	0.6 million cases
Capacity Utilisation	70%