CSD officials bust mixed edible oil racket in Rajkot

The recent raids conducted by the District Collectorate on trade establishments located in marketing yard area of Rajkot have exposed malpractices carried out in edible oil trade.

The officials from Civil Supplies Department (CSD) recovered huge stock of adulterated edible oil sold as groundnut oil.

"On basis of prior information of edible oil being adulterated, we raided those establishments where traders practiced violation of accounting protocol, like maintaining books of accounts, appropriate billing and receipts records etc,and recovered adulterated edible oil worth Rs 14,05,648 and seized huge stock of edible oil"" packaged as well as in loose format," explained Mona Khandhar, district collector of Rajkot .

The officials raided atleast 13 locations in Marketing Yard area including Ashray Enterprise, Ratnadeep Enterprise, Balmukund Traders, Govardhan Trading Co., Eshwar Trading Co., Sahajanand Trading Co., Giriraj Anaj Bhandar, Maruti Marketing, Jayraj Chandulal Vora, Raiyani Marketing, Vinay Oil Depot, Dhaval Enterprise and Shreenathji Anaj Bhandar, said an official assisting raid operations from CSD.

Based on the reports of the samples received, legal action will be taken against the concerned operators as per the provisions in Essential Commodities Act 1977 and Prevention of Black Marketing Act.

Further, legal actions are also being carried out in Food and Drug department as officials from Civil Supplies and Food and Drug department are investigating the matter jointly, he added. The seizure of such a huge stock of adulterated edible oil has revealed the brutal nexus of tinners and edible oil trader who have been carrying out such malpractices in trade for long.

It is to be noted that the stock has been seized immediately after the deadline for mandate of fortifying edible oil with vitamins and selling it in packaged format has been almost over and most of the edible oil operators are supposed to sell fortified edible oil in packaged form after February 1, 2006.

"There are establishments located in Shapar, Veraval, Gondal where adulteration process takes place when tinning of loose edible oil is in being processed and packed, they add rice oil and soyabean oil with groundnut oil in equal quantity and sell it in market, in a local lingo adulterated product is termed Disco Oil," said an eminent cattle-feed businessman from Gondal, who mainly deals in the bye-product of the oil-mills.

The edible groundnut oil is sold between Rs 775 to 785 inclusive of taxes, while the disco oil is sold at Rs 650 to 690, there is a clear variation in prices between the two from Rs 95 to 125, he added.

"Imagine the margins that these business operators might be cutting out, after mixing half quantity of groundnut oil with rice oil or soyabean oil, there margins are more than 50%, again its all unaccounted business, so you find lots of millionaires in Gondal who have been dealing in this business for years, he added.

Daily production of pure edible groundnut oil in Saurashtra region ranges somewhere between 15,000 to 20,000 tins as against which the daily production of disco oil ranges between 10,000 to 15,000 tins, its almost a parallel grey business channel operated in a very organised manner amongst the edible oil business operators, he detailed.

When Business Standard approached Uka Patel, SOMA President to react on the situation as few renowned branded products were also seized in the raid operations he said, "None of the oil-millers are involved in this scam as we had been clearly appealing from time to time that we oil-millers are not involved in adulteration of edible oil, but adulteration takes place when loose oil is given to tinners and packers, who mix-up the original product and sell it in market."

This raids are the result of the fractions where Gujarat edible oil lobby comprising mainly of tinners and packers, is tussling with the tinners and packers of Saurashtra and as a result such a huge stock has been seized, Infact we strongly support this move as it will eradicate such elements from the trade and we appreciate the efforts because haul of such a magnitude has been taken for the first time probably in the history of district administration, we are still anticipating seizure of such adulterated stocks from more operators, he added.