Swiggy shares fell 5% to an intraday low of Rs 266 on the BSE on Monday following reports that the Food Safety and Standards Authority of India (FSSAI) issued nine show-cause notices to the company’s quick commerce arm, Swiggy Instamart. The regulator alleges the platform supplied unsafe, expired, and mislabeled food products to consumers.
Regulatory Action Against Swiggy Instamart
The FSSAI issued nine notices to Swiggy Instamart on Saturday, citing multiple consumer complaints regarding the safety and quality of goods sold via the platform. According to the regulator, these complaints involve the delivery of expired, spoiled, rotten, and contaminated food items. The FSSAI has ordered the company to submit a detailed compliance report and documentary evidence explaining the alleged violations of the Food Safety and Standards Act, 2006.
The regulator’s orders require Swiggy to provide specific details regarding its internal quality assurance systems, stock rotation processes, inventory management, and hygiene standards. Failure to provide a satisfactory explanation or address these compliance gaps could lead to further legal action under the Act.
Specific Allegations of Non-Compliance
The FSSAI notice highlights several specific product categories where the company allegedly failed to maintain safety standards:
- Licensing Violations: The regulator stated that "NOICE Eggs" were marketed under a brand name not included in the company’s existing FSSAI license. The company had been previously instructed to cease marketing the product until it obtained the proper licensing, an instruction the FSSAI claims was ignored.
- Expired and Contaminated Goods: The regulator reported that "Healthify 100% Whey Protein (1 kg)" and "NOICE Homestyle Madras Mixture with Peanuts" were sold after their expiry dates. Furthermore, "Akshayakalpa Organic Egg" was identified as being rotten and contaminated, rendering it unfit for consumption.
- Infant Food Safety: The FSSAI notice alleged that an infant food formulation was supplied in a "severely deteriorated and unsafe condition." The document claims that after a customer returned the defective item, the same product was allegedly supplied again to the consumer.
Response and Market Impact
In addition to the physical quality of the goods, the FSSAI criticized Swiggy’s grievance redressal mechanism. The regulator noted that in several instances, the company failed to provide corrective action or address the underlying food safety concerns, in some cases merely offering a refund to the customer without investigating the source of the contamination.
Following the news, Swiggy’s stock extended a recent decline, dropping over 4% across two consecutive trading sessions. The company is now under pressure to demonstrate that its quick commerce fulfillment model can maintain the same regulatory rigor required of traditional retail operations.
Key Regulatory Requirements
The FSSAI has mandated that Swiggy Instamart provide transparency on the following operational areas:
- Quality Assurance: Documentation of current food safety monitoring processes.
- Inventory Control: Evidence of effective stock rotation and expiration tracking.
- Handling Practices: Protocols for storage and transport to prevent contamination.
- Compliance History: A full accounting of how previous consumer complaints regarding food safety were handled and resolved.
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