Indian distiller Som's shares plunge amid child labor concerns

BENGALURU (Reuters) -- Shares of Indian liquor company Som Distilleries and Breweries fell as much as 9% on Thursday after authorities said they would impound one of the group's distilleries, where officials said 59 children had been working illegally.

Police launched an investigation into Som after the National Commission for Protection of Child Rights (NCPCR) last week found 39 boys and 20 girls working at a distillery in Madhya Pradesh state. The agency also released photos of children's hands with chemical burns.

Som shares fell nearly 9% on Thursday, taking weekly losses to 15%, before recovering. The company is valued at $271 million, according to LSEG data.

Som said in an exchange filing this week the issue was related to a plant run by its "associate private limited company," which used labor supplied by contractors, who may not have carried out proper age checks.

Some of the children found working at the distillery were taken to the factory in school buses, NCPCR has said.

"On the basis of the interaction with the children, there is an apprehension that the minors found working in the said distilleries may have been brought to the premises in the guise of taking children to school or to play," NCPCR said in a June 19 letter to state officials, seen by Reuters.

The state government has temporarily suspended the plant's manufacturing licences.

The company in its 2022 annual report stated that its policy and practices relating to the protection of human rights, including not using child labor, apply to the company and its units, "as well as to the contractors engaged by the company."

In its latest 2023 annual report, Som flagged zero cases of child labor complaints filed by employees and workers.

Som sells beer and whisky