Som Distilleries Share Price Drop 16% After Rescue of 50 Children from Madhya Pradesh Plant

On June 18, shares of Som Distilleries and Breweries plummeted by 16 percent during early trading following an announcement by the National Commission for Protection of Child Rights (NCPCR). The NCPCR reported the discovery of 50 children working at the company's plant in Madhya Pradesh. Although the firm has denied employing child labor, it has attributed the issue to a private contractor being responsible for the incident.

The chairperson of the NCPCR announced that 58 children, including 20 young girls, were found at the plant. He noted that many children's hands had suffered skin burns due to exposure to chemicals. Consequently, the commission has filed a case against the company under juvenile justice and bonded labor laws.

“The case of child labour during a raid on a factory in Raisen district has come to my notice. This matter is very serious. In this regard, detailed information has been obtained from the officials of Labor, Excise and Police departments and instructions have been given for appropriate action. Strictest action will be taken against the culprits,” the Madhya Pradesh Chief Minister’s Office said on social media platform X.

In an exchange filing, Som Distilleries and Breweries clarified that the issues do not pertain directly to their company but to a private associate involved in the country liquor business. Som Distilleries attributed the mishap to private contractors, suggesting that they may not have conducted a thorough age verification process.

"The company has extended full cooperation to the authorities regarding the issue, and [has] terminated the services of the vendor," added the liquor-maker. Over the past year, Som Distilleries shares gained around 20 percent, underperforming the benchmark index Nifty 50, that rose around 25 percent during the same time period.

Som Group of Companies is an integrated AlcoBev player headquartered in Central India. The group engages in the production of beer, whisky, vodka, rum, gin, ready-to-drink beverages, and country liquor. They operate a brewery, a distillery, various support industries, and maintain a distribution network across the country. The group's diversification plays a crucial role in delivering top-quality brands to consumers and ensuring long-term value for stakeholders.