NESTLE, ZYDUS WELLNESS SHARES PLUNGE TO SIX-MONTH LOW

Shares of Nestlé India and Zydus Wellness came under selling pressure after the Food Safety and Standards Authority of India issued notices to both companies over allegedly misleading claims in their product advertisements. The regulator has sought scientific evidence from the companies to substantiate the claims made in their promotional and labelling materials. Nestlé India shares fell around 3.7% to touch a six-month low, while Zydus Wellness declined more than 3%, slipping below its six-month low. At the time of writing, Nestlé India shares were trading down 3%, The stock opened at Rs 1,210 before declining to an intraday low of Rs 1,184. It was also the top loser on the Nifty FMCG index, which was down around 2%. The food safety regulator issued notices to Nestlé India over claims and promotional materials related to its Lactogen Pro 1 Powder and Nan Excella Pro Stage 1 products. It also issued a notice to Zydus Wellness Products Ltd concerning claims made for its Complan nutritional drink. The regulator has asked Nestlé India to provide scientific evidence supporting the claim that whey protein is easy to digest. The company has also been directed to submit the required documents and supporting evidence within the stipulated period and explain why action should not be initiated against it under the Food Safety and Standards Act, 2006. For Zydus Wellness' Complan, FSSAI raised concerns over product labelling featuring images of two children and claims such as “2X Faster Growth”, “Supports Concentration and Memory” and “Pro Immunity+ 34 Vital Nutrients”.