For FDA, an uphill task to curb sale of spurious cosmetics

But even as they shut down the alleged business of manufacturing spurious cosmetics, the FDA knew this was a small player. Its proposal, currently under consideration with the Maharashtra government before it is sent to the Centre for approval, is to amend the Drugs and Cosmetics Act to bring retailers of cosmetics under its net and make every retailer register with the FDA, just like a chemist does for medicines.

If this move is approved, an estimated 5 lakh retailers, including chemists, grocery shops, beauty parlours and street-side hawkers across Maharashtra will have to approach the FDA for licences to sell cosmetics, even if it is a body lotion or a lip balm.

Counterfeiting: The modus operandi

The reason for the urgency in the FDA is the changing trend of the business of fakes. Earlier, manufacturers of spurious cosmetics would also procure fake bottles and fake labels. “Now they buy empty bottles from scrap dealers, and just re-fill it,” said Maharashtra FDA Commissioner Pallavi Darade.

In 2016-17, Maharashtra FDA recorded nine cases of spurious cosmetics sale. This year, till November, seven cases were registered.

At least one manufacturer, drug regulation officials claim, bought used L’Oreal shampoo bottles, each for Rs 3, from four Dharavi-based garbage dealers, who networked with beauty parlours to purchase empty bottles.

He would source raw material, mainly hydrogen peroxide, fragrance and active ingredients from four dealers in Mumbai, manufacture the shampoo, wash used bottles and re-fill them, an investigation revealed. About 5-10 ml of the original shampoo would be added to the top, to give an authentic fragrance, before the bottles were resealed and sold to parlours at discounted rates.

“We are investigating which salons purchased from him, but it is impossible to track customers,” says drug inspector Arun Godase.

In January, Godase had raided a store in Bhuleshwar, and seized Rs 1.8 crore worth of fake cosmetics. Laboratory analysis of the products showed that variation in PH levels and hydrogen peroxide could cause mild to severe skin irritation and varying level of hair loss.

Since 2016, L’Oreal has seized 7 lakh fake units of their brand from the Indian market. “Interestingly, some of these seized fake products do not even feature in the product catalogue of the company and are a sheer creation of the counterfeiter’s imagination. It is not only confined to the physical markets, but is also simulated in the online world,” a L’Oreal spokesperson said in e-mail response.

L’Oreal has filed cases against such counterfeited cosmetic units for Intellectual Property Rights violations. The FDA prosecutes them, through a painfully slow procedure, under Section 27 (A) of the Drugs and Cosmetics Act, for spurious cosmetics sale, which attracts fine of Rs 50,000, and imprisonment for three years.

“But the punishment needs to get more stringent to deter counterfeiting,” says Arjun Khadtare, joint commissioner (drugs), FDA, Maharashtra.

Challenges in controlling spurious cosmetics

The rackets run inter-state, and offenders often cross borders, making jurisdiction an issue. In November, the FDA conducted a drive across 100 beauty parlours and salons in Maharashtra. In Nagpur’s Bajeria area, they found four natives of Agra refilling empty shampoo bottles of Pantene, Himalaya, L’Oreal, Head & Shoulders and Sunsilk with locally manufactured shampoo. The bottles were sold at half price to beauty parlours. Scrap dealers acted as agents, supplying dozens of empty bottles.

“Parlours should squeeze and destroy each bottle after use. But we need to generate awareness,” says SS Mohite, FDA intelligence officer.

Also, the FDA across India is acutely short-staffed to raid and inspect all units. In Mumbai, only 13 of 21 drug inspector posts are filled. Across Maharashtra, the vacancy is 37 per cent of 162 posts.

But a greater problem is of lack of control over supply chain and retailers. In Maharashtra, for instance, FDA has power to inspect 800 licensed cosmetic manufacturing units, but has no control over an estimated 5 lakh retailers. “Sale of spurious cosmetics is also high because there is no check on supply and retail chain,” Mohite added.

In January this year, four teams of FDA raided cosmetics shops and manufacturing godowns, where fake Hindustan Unilever Limited (HUL) cosmetics were being sold at discounted price. Laboratory tests on all seized products showed they failed a microbial test, a key test for cosmetics safety. “Spurious and counterfeit products is a cause of serious concern. This problem not only affects the industry but more importantly impacts consumer interest,” an HUL spokesperson said. The company has set up a team of intelligence officers who gather inputs on the ground. In areas where the sale dips, and they suspect a counterfeiting racket, they tip-off the FDA. The company initiates criminal or civil suits under provisions of the Copyright Act, Food Safety and Standards Act and the Drugs and Cosmetics Act. Simultaneously, it is working with the government and police to raid such units.

If and when amended, the Drugs and Cosmetics Act will not only empower drug inspectors to keep better vigil, it is also expected to generate revenue for the government. Each cosmetic retailer will have to pay Rs 500 as an annual registration fee.