In an event that has taken the nation by surprise Maggi Noodles the famous 2 minute snack is in midst of food safety compromises looks like running towards a complete national ban. Maggi is owned by Nestle India a subsidiary of Swiss based Nestle S.A. headquartered in Switzerland.
The controversy broke out in Uttar Pradesh a state located in Northern part of India where high levels of lead content were found in regular tests conducted by food safety organizations. According to official reports lead content found in Maggi was 17.2 parts per million (ppm) whereas the permissible limit by government is between 0.01 ppm and 2.5 ppm. The state laboratory reports also stated high levels of Monosodium glutamate which is a taste enhancer found in Maggi.
Friday 5th June saw a sparkling series of events when nestle India itself withdrew all packets of Maggi from the Indian market amidst the controversy. In a press release by the organization nestle India said the noodles were completely safe to eat but explained that “recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer.” Maggi was already banned for 15 days in Delhi by the Delhi government and similar bans were also implemented in other states like Gujarat and Kerala.
Maggi has been in the Indian market now for more than 30 years and are ubiquitous throughout the country. Travel to the northern parts of Kashmir or the southern beaches of kanyakumari; backwaters of Kerala or the deserts of Rajasthan Maggi noodles are the most easily found and safe considered food item in the menu card. Ease of availability and less cooking time has made the product famous amongst children’s and adults. With such wide market spread; product withdrawal was a logistical impossibility in the short span of time
Safety concerns and misery grew for Nestle India as Singapore food safety authority ordered tests on samples and also issued an advisory for importers to withhold until the tests results are complete.
Food safety agency of United Kingdom today ordered tests on packets of Maggi sold in the UK market, which includes a particular variant masala which is imported from India. Food regulations in UK requires an organization to mention every item that goes into making the product so as to keep the customer aware of the ingredients whereas Indian markets do not have such stringent laws.
Controversies like this impact massive on the stock market; same has happened with nestle India. The shares took a toll and were trading down 3.28% on Friday at 5,813 as the company withdrew its product from the Indian market. The market recovered and the nestle share closed at 6,021 in NSE on weekend. Nestle India has lost more than 10,000 crore market cap in the last week since the fall of this controversy.
Nestlé’s global CEO Paul Buckle has been flown to India for damage control. The Belgian National spoke to Indian press and was firm that the organization follows highest level of safety standards and there was no Lead or MSG in the product. Buckle also said there was lack of clarity in the manner with which these tests were carried out by the local authorities as the tests run within organization did not show such results.
5th June, Friday Food Safety and Standards authority of India (FSSAI) issued a notice to Nestle outlining 3 violations:-
More than permissible amount of lead detected in the product
Misleading label information saying “ No Added MSG”
Release of a non-standardized food product in the market, that is “Maggi Oats Masala Noodles with Tastemaker,” without risk assessment and grant of product approval
Maggi India is a cash cow for nestle and contributes more than 30% of the annual revenue contribution to nestle.
Last year it was China and fast food through KFC and McDonalds, will this year food safety scandal be India and Maggi Noodles.
By: Manu Arora