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 the domestic consumers with almost same quality and health benefits. Accordingly, the company got its product approved by the domestic competent authority and launched the product in 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 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 which 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 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.

The situation

A reputed exporter was found selling, in the domestic market, products at variance with approved standards and even dumping rejected export goods — endangering consumers while profiting from double standards.

Stakeholders

• Domestic consumers whose health and right to safe food are at stake.
• The company, its shareholders and employees.
• The regulator (FSSAI) and the state.
• Honest competitors and the country's export reputation.

(a) Action by the competent authority

• Immediate product recall and suspension of sale under the Food Safety and Standards Act, 2006.
• Laboratory testing, penalties and prosecution for misbranding and unsafe food.
• Suspension or cancellation of licence for repeated violation.
• Public disclosure to warn consumers and deter others.

(b) Course available to the company

• Own the lapse — a transparent public apology and full recall.
• Fix accountability internally on those responsible.
• Compensate affected consumers and overhaul quality assurance with third-party audits.
• Rebuild trust over time through consistent compliance and openness, not advertising alone.

(c) The ethical dilemma

The real conflict is between profit and consumer safety, and between honesty and reputation. The double standard — higher quality for exports, inferior goods for citizens — is a betrayal of the equal moral worth of the domestic consumer. Once discovered, the company faces the choice of concealment versus disclosure; ethics demands disclosure and remediation, since concealment compounds the wrong.

Conclusion

Sustainable business rests on trust; a firm that treats safety as negotiable ultimately destroys the very profitability it sought to protect. Firm regulatory action plus honest corporate remediation together restore public confidence.