GS Paper 4 (Ethics)Food safety and corporate ethics
A reputed food product company based in India developed a food product for the international market and started exporting the same after getting necessary approvals. The company announced this achievement and also indicated that soon the product will be made available for domestic consumers with almost the same quality and health benefits. Accordingly, the company got its product approved by the domestic competent authority and launched the product in the Indian market. The company could increase its market share over a period of time and earned substantial profit both domestically and internationally. However, the random sample test conducted by the inspecting team found the product being sold domestically in variance with the approval obtained from the competent authority. On further investigation, it was also discovered that the food company was not only selling products that were not meeting the health standard of the country but also selling the rejected export products in the domestic market. This episode adversely affected the reputation and profitability of the food company. (a) What action do you visualize should be taken by the competent authority against the food company for violating the laid down domestic food standard and selling rejected export products in the domestic market? (b) What course of action is available with the food company to resolve the crisis and bring back its lost reputation? (c) Examine the ethical dilemma involved in the case.
Based on 31 evaluated answers to this question on CollectorBabu: here is what aspirants most often missed, the mistakes that cost marks, and a model answer.
What most aspirants missed
- Dual standard issue: domestic consumers received lower-quality product than export buyers, which is the core ethical violation
- Specific FSS Act provisions and penalties: Section 51 substandard food, Section 53 misleading claims, Section 59 unsafe food with imprisonment, Section 66 liability of responsible persons
- Product recall of all domestic stock already sold, and of rejected export stock diverted to the domestic market
- Whistleblower protection for employees and inspecting officials who raised the issue, and the reasons it was not reported earlier
- Corporate governance failure: board responsibility for quality oversight and an independent quality control function
- Real examples such as the 2015 Maggi controversy or the 2003 Cadbury worm controversy, and the Johnson and Johnson Tylenol recall
Common mistakes
- Mixing authority actions with company actions in part (a), or leaving parts (a), (b) and (c) unseparated
- Listing violations without examining the actual dilemma faced by decision-makers, which is what the question asks for
- Giving vague remedies such as ask for forgiveness or upgrade the law, without naming the specific provision or concrete step
- Demanding immediate licence cancellation without noting the graded route of improvement notice, suspension and cancellation
What the better answers did
- Clear separation of parts (a), (b) and (c) with headings, as the question is structured
- Naming FSSAI and the FSS Act 2006 with specific sections and penalty amounts
- Framing part (c) as a real conflict, such as profit versus public health or domestic versus export standards, linked to Article 21
- Dividing company remedies into short-term (recall, compensation) and long-term (third-party audits, governance reform) measures
Introduction
Open by naming the dual-standard violation and the profit versus safe-food conflict, then state that the response will cover enforcement, recovery and ethics separately.
Conclusion
End by stressing that domestic consumers must get the same safety standard as export buyers, and that lasting trust depends on governance reform rather than damage control alone.
Model answer
The case is a clear instance of a dual standard: the company met export norms for foreign buyers but sold substandard and rejected stock to Indian consumers. This violates the Food Safety and Standards Act, 2006 (FSS Act) and raises a basic conflict between profit and the consumer's right to safe food, which is part of Article 21.
(a) Action by the competent authority (FSSAI and State Food Safety Authorities)
- Immediate recall of all domestic batches that deviate from the approved formulation, and of rejected export stock found in the market, under the recall provisions of the FSS Act
- Improvement notice under Section 32; if not complied with, suspension and then cancellation of licence, graded according to severity rather than cancellation at the outset
- Penalties: sale of substandard food under Section 51 (up to Rs 5 lakh), misbranding under Section 52 (up to Rs 3 lakh), misleading claims under Section 53 (up to Rs 10 lakh), and unsafe food under Section 59, which carries imprisonment where injury or death results
- Prosecution of the company and the responsible persons under Section 66 (offences by companies), with criminal liability for those in charge of quality
- Consumer compensation through the Consumer Protection Act, 2019 and, where warranted, blacklisting from government procurement
(b) Course of action for the company
- Cooperate with the investigation, accept the findings and pay the fine rather than contest the basics
- Recall and destroy non-compliant stock, and compensate affected consumers through a documented claims process
- Independent third-party quality audits of all plants, with reports published openly
- Strengthen governance: a board-level quality committee, an independent quality control function reporting to the board, and a whistleblower policy under the vigil mechanism logic of Section 177 of the Companies Act, 2013
- Corrective public disclosure, consumer advocacy engagement and CSR-led nutrition programmes to rebuild trust
(c) Ethical dilemma
- Profit versus public health: the firm chose margins over the safety of domestic consumers
- Dual standards: superior quality for export buyers and inferior quality for Indian consumers treats domestic consumers as second-class, an exploitation of regulatory asymmetry
- Shareholder interest versus consumer safety and employee integrity: staff who knew of the violation faced pressure to stay silent
- Kantian test: consumers were used merely as a means to higher sales, and the company's claims of equal quality were deceptive
The firm must treat domestic and export consumers equally, since safe food is a right, not a market segment. Lasting recovery will depend on governance reform and transparent accountability, not only on damage control.
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