Fast Moving Consumer Goods (FMCG) is the 4th largest industry in India, representing a major portion of the Indian Economy. This industry is highly regulated and can be broadly categorised into the following:
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Food and Beverages,
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Cosmetic and Toiletries,
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Food Supplement and Over the Counter Medicine,
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Electronic and other household goods,
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Stationery Products,
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Sanitary Products.
Being highly regulated, the sector is continuously met with changing regulatory norms which is evident from the number of notifications and policies which keep coming out. It is extremely critical for FMCG companies to keep abreast of all the regulatory notifications and changes in law affecting them and adhere to them. Lack of effective regulatory compliance management system can lead to threat of non-compliance and pecuniary loss. In the past, many companies in India have been in the news for being targeted by law authorities for non-compliance with rules and regulations.
Lexplosion understands the complex regulatory space and structure which is prevalent for FMCG companies and with its experience of having catered to such companies recognizes the need for these companies to stay compliant at all times. Lexplosion aims to help more and more companies mitigate risks by implementation of its proprietary compliance management software, Komrisk. At Lexplosion, we focus on legal risk management software, with a key focus on helping companies identify the legal issues they are facing, analysing the current systems, doing the gap analysis, and accordingly curate a customised compliance solution for the Companies to help them monitor and manage regulatory framework affecting them.
Compliance Management Challenges for FMCG Industry
Lexplosion has been helping many FMCG Companies in building strong regulatory compliance management system and regimes. While working with these companies we have realised that the most critical of all problems has been keeping on top with the changing regulatory norms under various laws and not having a centralized mechanism for managing and monitoring the compliances applicable to them under various modules of law. As an FMCG company some of the critical laws which affect the business are Legal Metrology Act, 2009, Legal Metrology (Packaged Commodities) Rules,2011, Competition Law, Environment Protection Act, 1986, Cable Television Regulatory Rules,1994, ASCI’s Code of Self-Regulation in Advertising (ASCI Code), The Consumer Protection Act, 1986, Right to Information Act,2005, Goods and Service Tax Act, 2017.
Some of the critical compliances for FMCG Companies are focused around:
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Compliance with FDI Policy
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Compliance with major laws regulating food Compliance with other/minor sectoral food Laws
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IPC provisions on Food adulteration etc.
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Advertising Standards Council of India (ASCI)
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The law on Weights and Measures
Other prevailing concerns are mostly around lack of having a robust hierarchy of compliance management people, maker–checker matrix, no real time visibility to the reports for CXO level.
What Lexplosion does to mitigate their problems?
Our experience has grown with our client involvement and our compliance management software, Komrisk has evolved by recognising the issues and concerns faced by large businesses dealing in the business of consumer goods. We strive to make the engagement with the client simple and effective to meet their requirements. Our on-boarding process is automated and allows users to identify all the laws and compliances applicable by providing details of the business. Komrisk enables easy allocation of compliances across modules of law, locations, entities, and their operating units. Komrisk as a solution allows generating critical reports for the Key Managerial Personnel on a click of a button. The USP of Komrisk lies in the fact that users can complete tasks on the move by using the mobile application. The tool is equipped to not just take care of the statutory compliances but also policy related or internal compliances. Risk categorisation of each compliance is also an adding feature which enables the Companies to monitor their high-risk category compliances effectively.
Adopting of compliance management system can sometimes be a daunting task as it involves moving from the existing current systems to a new environment. At Lexplosion, we assure you of a seamless and a stress free on-boarding on Komrisk for a user-rich experience. The teams can be aligned to the solution in few weeks thereby bringing greater transparency and accountability. A centralised compliance solution enables Companies to improve transparency within the organization and keeps the reputation of the Company intact. FMCG is a highly regulated sector and having an efficient compliance program should be on top of the agenda of such companies.
Get in touch with us to understand how we helped companies like yours in seamlessly adopting a customised compliance solution and creating a strong compliance regime for you.
Written by: Amanya Gangawat
Reviewed by: Anchal Sharma
Disclaimer
All material included in this blog is for informational purposes only and does not purport to be or constitute legal or other advice. This blog should not be used as a substitute for specific legal advice. Professional legal advice should be obtained before taking or refraining from an action as a result of the contents of this blog. We exclude any liability (including without limitation that for negligence or for any damages of any kind) for the content of this blog. The views and opinions expressed in this blog are those of the author/(s) alone and do not necessarily reflect the official position of Lexplosion Solutions. We make no representations, warranties or undertakings about any of the information, content or materials provided in this blog (including, without limitation, any as to quality, accuracy, completeness or reliability). All the contents of this blog, including the design, text, graphics, their selection and arrangement are the intellectual property of Lexplosion Solutions Private Limited and/or its licensors.
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