By Rahul Singh and Krishna N. Das
NEW DELHI, Dec 20 () - India's drugs regulator has ordered Johnson & Johnson to stop manufacturing its Baby Powder using raw materials in two of its Indian factories until test results prove they are free of asbestos, a senior official said on Thursday.
The official at the Central Drugs Standard Control Organization (CDSCO), who declined to be named citing the sensitivity of the matter, said a written order had been sent to the U.S. company telling it to stop using the "huge quantities" of raw materials stocked in its plants in northern and western India.
The CDSCO also collected samples of the company's baby shampoo and soap products as a matter of routine, the official said.
"Whenever inspectors feel there is contamination in one thing they also take samples of (other products) from the same company," the official said.
The visits came as the CDSCO and state-based food and drug administrations launched an investigation into J&J's Baby Powder following a report last Friday that the firm knew for decades that cancer-causing asbestos could be found in the product. J&J has described the article as "one-sided, false and inflammatory".
The company told that it is in full compliance with the current Indian regulatory requirements for the manufacturing and testing of its talc.
"All talc in India is sourced and exclusively sold in India and surrounding markets - including Sri Lanka, Bangladesh, Nepal, Bhutan, Maldives - and fully meets the regulatory standards of the Government of India," the company said in an emailed statement.
J&J also said its talc is routinely tested by both suppliers and independent labs to ensure that it is free of asbestos.
Asked if the order meant the company would have to stop producing its ubiquitous Baby Powder in India for now, the official at the drugs regulator said that was "the inference you have to take" at least as far as the stores of raw materials were concerned.
"We have told them until this investigation concludes, you should not use the raw material. Test results will take time," the official said. "Testing for asbestos is not a routine procedure. It might be in traces. It will require us to develop a method and all those things."
J&J's Baby Powder is one of the most recognised foreign brands in India.
The company started selling its Baby Powder in India in 1948, just a year after the country won independence from Britain. Presenting gift boxes containing the product and others aimed at newborns is almost a family ritual in this country of 1.3 billion people, 28 percent of whom are aged 0-14.
The company also commands a strong retail distribution network through small pharmacies, larger stores and the internet.
There is yet to be any significant signs of a backlash against J&J products in India. At eight pharmacies across India visited by reporters on Thursday, seven said J&J remained the No. 1 seller of powder for babies.
That doesn't mean it isn't under pressure from local and international competitors who sell talc-type powders, such as Bengaluru-based Himalaya Herbals, and Italy's Artsana, which produces Chicco baby brands.
And some individual consumers say they are now very wary of J&J's Baby Powder.
"It is really very, very shocking," said Sitaram Beria, a chartered accountant in the eastern city of Bhubaneswar. He said he stopped applying J&J powder to his six-month old baby after hearing about the report over the weekend.
J&J leads sales in the Indian baby and child toiletries market, which market research provider Euromonitor estimates would be worth 12.5 billion rupees ($178 million) this year, and forecasts will grow 84 percent to 23 billion rupees in 2022.
Euromonitor did not give a breakdown for baby powder alone but said J&J was the biggest player in the overall segment, followed by Mumbai-based VVF Ltd, Artsana, Wipro of Bengaluru and Himalaya.
Himalaya said in a statement that its herbs-based baby care products "are exclusively promoted and recommended by over 40,000 doctors in the country, which is the greatest endorsement for us," while declining to provide any financial figures.
The other companies could not be reached for comment.
($1 = 70.2600 Indian rupees)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.