Government Advisory May Impact Sales of Health Food Drinks, Including Bournvita
The recent advisory issued by the Centre to e-commerce platforms, directing them to remove the label of ‘health drinks’ from certain popular brands like Bournvita, could have a significant impact on the sales of health food drinks in India. Market experts suggest that this move might affect the broader category, which has already been experiencing a slowdown due to high input costs. The advisory, issued by the commerce and industry ministry’s department for promotion of industry and internal trade (DPIIT), highlighted the lack of standards and definition of ‘health drinks’ under India’s food laws. It follows a notice by the Food Safety and Standards Authority of India (FSSAI) earlier in April, urging e-commerce platforms to ensure appropriate categorization of products sold under the health and energy drinks category. While health food drinks in India have been marketed primarily as malt-based milk drinks offering some nutritional benefits, companies use various tags to promote their products. However, the term ‘health drink’ lacks a standardized definition under the FSSAI rules or regulations. Market experts anticipate that this advisory could lead to a temporary slowdown in the stocking of such brands, particularly in tier-I markets. However, companies may focus on expanding their presence in tier-II and rural markets to mitigate the impact. Analysts believe that while the advisory might affect sales in the short term, consumers generally purchase these products based on their preferred brands rather than the category label. Additionally, sales volumes in this category have already been sluggish due to price hikes. Overall, the move aims to address concerns related to high sugar content and misleading health claims, particularly those targeting children. It underscores the need for regulatory measures to ensure consumer safety and transparency in product labeling and marketing. Despite the potential impact on sales, companies are yet to respond to queries regarding the advisory, reflecting the evolving dynamics in the health food drinks market and the regulatory landscape.