Dabur's units face lawsuits in US and Canada over hair-relaxer products

Lawsuit on Dabur in US and Canada: Three foreign subsidiaries of Dabur India are currently entangled in multiple lawsuits filed in the federal and state courts of the United States and Canada. These lawsuits allege that their hair-relaxer products have been linked to cases of ovarian cancer, uterine cancer, and various health-related issues.

The three Dabur India subsidiaries named in these lawsuits are Namaste Laboratories LLC, Dermoviva Skin Essentials Inc, and Dabur International Ltd, according to a late-night regulatory filing from the Indian FMCG and Ayurvedic products manufacturer on Wednesday.

The filing noted, "Cases have been filed in both federal and state courts in the United States and in Canada. The federal cases were consolidated as a Multi-District Litigation, also referred to as MDL, before the United States District Court for the Northern District of Illinois."

Presently, there are around 5,400 cases within the Multi-District Litigation, with Namaste, Dermoviva, and DINTL named as defendants, alongside other industry players.

Hair relaxer products containing cancer-causing chemicals

The allegations stem from claims made by some consumers in the hair relaxer product industry, who argue that certain industry players or defendants sold and/or manufactured hair relaxer products containing chemicals that led to ovarian cancer, uterine cancer, and other health concerns among users.

Dabur stated that its subsidiaries, Namaste, Dermoviva, and DINTL, "deny liability" and have retained legal counsel to defend against these lawsuits, asserting that these allegations are founded on unsubstantiated and incomplete studies.

All the cases are currently in the pleadings and early discovery phases of litigation, wherein parties are contesting the adequacy of plaintiffs' complaints and, in some instances, exchanging requests for information and documents.

The filing indicated, "There are various motions pending as well."

Impact cannot be determined yet

Regarding potential financial implications for the company due to compensation or penalties, Dabur noted that, at this stage of the litigation, the impact "due to settlement or verdict outcome cannot be determined."

"Since we are in the initial stage of litigation, any final claim settlement amount is neither probable nor estimable," it added.

However, the company acknowledged that the defence costs for the litigation are anticipated to exceed the materiality threshold in the near future.

Dabur India currently operates 27 subsidiary companies, which contributed to 26.60 per cent of the consolidated revenue from operations in FY 2022-23. The revenue from the international business was recorded at Rs 2,867 crore, with an 11.1 per cent growth in constant currency terms in FY23. Dabur India also has 8 international manufacturing locations, as per its latest annual report.

(With PTI inputs)