A regulatory notice can last a few news cycles. The question for FMCG brands is what happens after the headlines fade.
The recent tussle between Dabur India and the Food Safety and Standards Authority of India (FSSAI) brings that question into sharper focus. The Delhi High Court has stayed the regulator’s directive prohibiting Dabur from selling products such as honey with ‘100%’ claims, after the company challenged the order on grounds of natural justice. The court has issued a notice to FSSAI and listed the matter for August 24.
While the dispute is centred on compliance around labelling and claims rather than product safety, it highlights a larger marketing challenge: once a regulator enters the conversation, consumers can start looking at a familiar brand through a different lens.
From claim scrutiny to consumer scrutiny
According to independent consumer consultant Akshay D’Souza, “Regulatory scrutiny does not automatically destroy brand trust, but it is a strong risk perception.” He explains that a previously unquestioned promise around ‘safety, purity, honesty or quality’ can suddenly become a public test.
That test can move consumers through three stages. First comes awareness, as consumers seek information about a claim they may previously have ignored. Then comes risk assessment, particularly when the product is linked to family health. Finally comes brand choice, where communication can play a crucial role in determining whether preference returns.
D’Souza believes the Dabur-FSSAI episode appears to be ‘more of a compliance issue on the 100% claims and labelling compliance; not a question on product risk.’ But that distinction may not always be obvious to consumers once regulatory scrutiny becomes part of the public conversation.
The consequences can also extend beyond purchase intent. D’Souza points to product availability as another indicator of impact. If retailers see consumer perception deteriorating, they may reduce points of sale rather than risk tying up money in inventory.
Advertising cannot paper over a credibility problem
For agencies, regulatory scrutiny is changing the process well before a campaign reaches the consumer. Regulatory scrutiny changes the creative question from whether a claim can be made compelling to whether the brand can stand behind every word of it.
Therefore, substantiation and compliance need to enter the creative process much earlier. But Jyoti Chugh Bhatia, Group Director, Gozoop Creative, does not believe brands should become overly cautious or lose their voice. Instead, the opportunity is to communicate genuine consumer benefits without stretching the truth.
“When every claim needs to be backed by something tangible, it can push brands towards more honest and meaningful communication,” she says.
The controversy may fade. The memory may not.
One of the biggest assumptions in brand marketing is that consumers eventually forget. The reality is more complicated.
Bhatia believes consumers may have short attention spans but ‘very long memories when it comes to things that affect their trust.’ A strong brand can cushion a one-off incident, but if the issue contradicts something fundamental to the brand’s identity, it can stay with consumers for much longer.
What consumers remember, she argues, may ultimately be less about the controversy itself and more about how the brand responded.
The Maggi lesson
D’Souza points to the Maggi controversy as an example of how prolonged uncertainty can reshape consumer behaviour. While consumers eventually returned to the brand, he says it took years to fully regain trust.
One factor was limited brand communication, which left consumers with little immediate reason to return and gave competing products an opportunity to enter the consideration set.
The lesson for brands facing scrutiny is therefore not simply to defend a claim. It is to actively address the consumer concern created by the controversy.
That could mean using credible third parties such as nutritionists, health coaches or influencers, communicating evidence more clearly, and proactively addressing comparisons with competing products.
The real battle is for confidence
Digital media advisor Sanjay Trehan takes an even more direct view: regulatory scrutiny ‘impacts quite significantly.’
“Trust is built over time and regulatory scrutiny erodes the credibility of a brand,” he says. Purchase behaviour may be affected in the short term, but the longer-term outcome depends on how the brand responds.
The danger, according to Trehan, is uncertainty. Regulatory scrutiny can ‘create uncertainty, spread scepticism and cause reputational damage,’ ultimately affecting customer confidence.
But he believes legacy brands have an advantage. “Brand resilience and legacy determine how long the impact will last,” he says, adding that established brands can demonstrate greater resilience and recover faster.
That does not mean controlling the narrative. In fact, Trehan argues that brands should stop thinking primarily in terms of narrative management and focus instead on ‘doing right by the consumer.’
The prescription is straightforward: proactive communication, ethical values, regulatory compliance and community engagement. Brands also need ‘a vocabulary based on honesty, integrity and trust,’ backed by active communication and functioning channels for consumer concerns.
For FMCG marketers, that may be the most important takeaway from regulatory scrutiny. The crisis may begin with a claim, a label or a directive. But the real test is whether consumers continue to believe the brand behind it. Because when the regulator steps in, advertising may still get the microphone. But credibility is what decides whether consumers keep listening.
