Uttarakhand licencing authority filed an affidavit in the Supreme Court notifying the suspension on 14 products manufactured by Divya Yoga Pharmacy for misleading advertisements.
Patanjali has violated the Drugs and Magic Remedies Act repeatedly which eventually led to suspension of its 14 products. The affidavit of the state, filed through Dr. Mithilesh Kumar, joint director of State Licensing Authority, Ayurvedic and Unani Services, said that: “In an order issued on April 15, 2024, to Divya Pharmacy and Patanjali Ayurved Limited, it was conveyed that the manufacturing licences for 14 products were suspended with immediate effect. The suspension took place for repeated violations of regulations, particularly concerning misleading advertisements, under Rule 159(1) of The Drugs and Cosmetics Rules, 1945.”
Patanjali surely had a fairy-tale growth story. The company started with a product line of toothpaste, soaps, honey, ghee, and so on.
The Inception: Patanjali Ayurvedic Limited (PAL) started as a private limited company in 2006. One year later, it was converted into a public limited company. From 2011-12, the company started campaigning for ayurvedic and herbal products. Patanjali head, Acharya Balkrishna mentioned: “The first Rs 5,000 crore was organic growth, as we sold to people who knew us.”
Astonishing Growth: A company with a revenue of 4.46 Billion USD in 2011-12, saw a massive growth in sales turning the revenue into 50 Billion USD in 2015-16.
In 2017, Patanjali became the second-biggest FMCG company in India, behind the Hindustan Unilever (HUL).
Reasons for Growth: Patanjali had a unique appeal to the Indians in the beginning of the second decade of the new millennium as people started preferring consumables which are ‘herbal’, ‘healthy’, and ‘organic’.
Patanjali came with not so unique FMCG (Fast-moving Consumer Goods) products like grocery and staples including dals, pulses, flour, rice; ready food like biscuit, cookies, pickles; beverages like fruit juices; personal care essentials like face wash, soap, tooth paste, shampoo, lotion; nutritional supplements; household essentials like detergents.
Low product prices along with ‘swadeshi’ positioning are the major reasons behind Patanjali’s success. There was a time when almost all the modern retailers created exclusive Patanjali aisles, but the scenario changed completely.
The Begin of Fall: Despite the need, Patanjali faced distribution challenges. The product quality was under scanner from the beginning. It was accompanied by bad and misleading marketing.
Poor Marketing Strategies: According to data with AdEx India, “Patanjali was the third biggest FMCG advertiser in India in 2016, behind HUL and Dettol-maker Reckitt Benckiser. Between January and July of 2018, Patanjali had slipped to 11th place. It has now further dropped to 40th rank in the same period of 2019.”
Loss of Reputation: Currently, with the ban of drugs like Swasari Gold, Swasari Vati, Bronchom, Swasari Pravahi, Swasari Avaleh, Mukta Vati Extra Power, Lipidom, Bp Grit, Madhugrit, Madhunashini Vati Extra Power, Livamrit Advance, Livogrit, Eyegrit Gold and Patanjali Drishti Eye Drop, Patanjali’s reputation hit the bottom low.
The drug inspector/district ayurvedic and unani officer, Haridwar, had filed a criminal complaint against Mr. Ramdev, Acharya Balkrishna, Divya Pharmacy and Patanjali Ayurved Limited under sections 3, 4 and 7 of the DMR Act on April 16, 2024.
Unplanned expansion, poor supply chain management, deteriorating product quality, unethical business practices have hurt Patanjali's revenues badly.
Patanjali surely needs to recalibrate its strategy, product lines, and logistics in order to see future growth.
