Cadbury India's second plant in Maharashtra is now under the lens of Maharashtra's food and drugs administration. "We are looking at quality control issues in the Thane plant as well. Further, we are seizing only one brand (Dairy Milk) from a wholesaler and that is the reason nothing has been seized from retailers," FDA Commissioner Uttam Khobragade told Business Standard.

Cadbury Dairy Milk is mainly manufactured at Cadbury's factories in Talegaon near Pune and Thane, which cater to the entire country. The company's chocolates reach over 650,000 retailers directly and indirectly.

The FDA started inspecting Cadbury India's plants after worms were allegedly found in a Cadbury Dairy Milk chocolate bar. The chocolate bar was produced at Cadbury's Talegaon plant. The FDA has also sent the allegedly contaminated pieces for testing at its laboratories.

If the FDA finds evidence of infestation or contamination, Cadbury India could face action under the Prevention of Food Adulteration Act. Khobragade declined to say whether Cadbury India executives faced arrest.

The revenue and the bottom line of the local arm of British confectionery and beverages giant Cadbury Scheweppes could take a hit if the FDA decides to initiate action against it.

Cadbury Dairy Milk, the flagship brand, contributed about 30 per cent to the company's Rs 687.30 crore (Rs 6,873 million) turnover in 2002. Cadbury India is the market leader with brands like Dairy Milk, Five Star, Perk and Gems, with a market share of over 65 per cent. Cadbury Dairy Milk has a 30 per cent share of the packaged chocolate market.

In a faxed response to a Business Standard questionnaire, Cadbury India said: "Only a specific lot of Cadbury Dairy Milk chocolates has been set aside as a precautionary measure by the FDA, pending further investigations at some stocking locations. Other than this, manufacture, stocking and sale of Cadbury chocolate brands continue."

After the discovery of the infested bar from batch number 28F311, the company checked the factory samples of this batch and found them to be of good quality and free of any traces of infestation, the company said.

"In spite of every care being taken at the manufacturing stage, chocolate is a food product that requires specific care and attention in storage. Additionally, every Cadbury product label mentions the care instruction: `Store in a cool, hygienic and dry place'. However, chocolates are susceptible to infestation if they are stored near grain and cereals or in unhygenic conditions," a Cadbury spokesperson said.

Mumbai-based distributors of Cadbury said they were aware of the development but had not been contacted by the company or the authorities to freeze stocks.