Home Biz Operations Maggi controversy: Storm in a noodle bowl

Maggi controversy: Storm in a noodle bowl

Maggi controversy: Storm in a noodle bowl
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“Why should we be eating Maggi with lead in it?” That was the question that a Supreme Court bench headed by Justice DY Chandrachud asked senior advocate Abhishek Manu Singhvi, who was representing Nestle India. It was in response to the latter’s reply that the lead content in the popular instant noodles was well within the permissible limits and there was some amount of lead in various other products. And this was also minutes before it lifted a stay on the proceedings of a class-action suit filed by the central government against the maker of Maggi noodles in the apex consumer court.

Yesterday, the Supreme Court revived the government’s case in the National Consumer Disputes Redressal Commission (NCDRC) against Nestle India seeking damages of INR 640 crore for alleged unfair trade practices, false labelling and misleading advertisements. These assertions were made under the provisions of the Consumer Protection Act, 1986.

The judicial bench headed by Justice Chandrachud said that the report of Central Food Technological Research Institute, Mysuru (CFTRI) where the samples of Maggi were tested, will form the basis for the proceedings. This has come as a big blow to Nestle India as the NCDRC can continue with proceedings against it, based on test results of Maggi noodle samples conducted by the CFTRI.

In a statement, Nestle India said that it welcomed the orders passed by the Supreme Court in the Maggi noodles matter. While informing the court that CFTRI found the noodles to contain lead within permissible limits, Advocate Singhvi told the court that it could not be ascertained whether the monosodium glutamate (MSG) in it was natural or added.

The apex court’s ruling could very well lead to review its packaging and adopt an alternative advertising communique style for Maggi. It might even revisit its advertising tagline ‘Kuch Achha Pak Raha Hai’, according to industry sources.

The 2015 Maggi recall dealt a big blow to Nestle India, which commanded almost 80% market share of India’s noodles market. It suffered a loss of INR 500 crore due to the crisis.

THE STORY SO FAR

In June 2014, Food Safety and Drug Administration officials discovered that samples of Maggi noodles sent to the Central Food Laboratory in Kolkata had over 1,000 times more lead than what Nestle India claimed. The Uttar Pradesh food safety commissioner sent a formal notice to Nestle seeking clarification on presence of MSG and lead in these samples. While the FMCG company mailed its response along with its internal monitoring documents on 5 May 2015, it failed to take any proactive step to counter any possible repercussions. In its first official statement on 21 May, 2015, it said there was no order to recall Maggi noodles being sold and the instant noodle was safe to eat.

On 5 June 2015, FSSAI asked Nestle to recall Maggi noodles. Between this date and 1 September 2015, Luca Fichera, Nestle India’s executive Vice President, Supply Chain oversaw a team that collected 38,000 tonnes of Maggi noodles from almost 3.5 million retail stores, and destroyed them at 11 cement plants across the country.

In December 2015, the Indian judiciary court stayed NCDRC proceedings against Nestle India and directed the testing of the noodles by CFTRI. In April 2016, the FMCG major passed these tests and the noodle brand was affirmed safe for consumption.

The 2015 incident dealt a big blow to the Indian arm of the Swiss FMCG giant, since the two-minute noodle brand commanded almost 80% market share of India’s noodles market, as estimated by Nomura Securities in May 2015. Nestle India’s business suffered a loss of INR 500 crore due to this crisis. However, it gradually worked its way back to profitability and according to various sources, currently has 60% of the instant noodle market share. In September 2017, the company also partnered with FSSAI to open a food safety institute in Manesar, to showcase itself as a brand that is committed to food safety.

However, this latest judicial salvo has just brewed a fresh new storm for Nestle India. All eyes are on the company to see how it will deal with this body blow to the star brand in its portfolio.

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