BackNestle India to bring back Maggi noodles by month end
The statement came after three laboratories certified by the NABL declared the newly manufactured Maggi noodles safe for consumption
Premium
New Delhi: Swiss packaged food maker Nestlé SA’s Indian unit, Nestlé India Ltd, on Wednesday said it will bring Maggi noodles back to shop shelves by the end of the month.
Nestle India’s statement came after three laboratories certified by the National Accreditation Board for Test and Calibration Laboratories (NABL) declared the “newly manufactured" Maggi noodles safe for consumption.
“All the samples of Maggi noodles masala have been cleared with lead much below permissible limits," the company said.
“Now that the orders of the Bombay high court have been complied with, we will make our best endeavour to commence the sale of Maggi noodles masala within this month as well as continue engaging with states where permissions are needed or specific directions may be necessary," Nestle India said.
The popular instant noodles, which accounted for about 30% of Nestle India’s revenues in 2014, were pulled from the market, starting 5 June, after the country’s food regulator Food Safety and Standards Authority of India (FSSAI) ordered the company to withdraw all nine variants of the instant noodle brand, calling them unsafe and hazardous for human consumption. It cited excess lead content and traces of monosodium glutamate (MSG), a flavour enhancer, as reasons.
Nestle India then moved the Bombay high court, which, on 13 August, set aside the ban imposed by FSSAI and asked the company to get its noodles tested by three specified NABL-certified laboratories.
On 17 October, Nestlé India said the three laboratories had cleared the samples of Maggi noodles produced earlier safe for consumption.
According to the court order, Nestle had to also get fresh batches tested and declared safe by the laboratories to commence sales. The company cleared the final hurdle on Wednesday.
Nestlé has Maggi Noodles production facilities in Moga (Punjab), Bicholim (Goa), Nanjangud (Karnataka), Taliwal (Himachal Pradesh) and Pantnagar (Uttarakhand). It also used to produce the instant noodles through contract manufacturers in West Bengal and Delhi.
Nestle has already started producing Maggi noodles at three of its units at Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa). “For the other two locations at Tahliwal and Pantnagar, we are engaging with relevant authorities in Himachal Pradesh and Uttarakhand to obtain directions for commencing manufacture of Maggi noodles," the company said.
Nestlé India has conducted over 3,500 tests, representing over 200 million packs, in both national as well as international accredited laboratories and all the reports are clear, the company claimed. In addition to these tests, the US, the UK, Singapore, Australia, have found Maggi noodles exported from India safe for consumption.
Nestlé India said the company is committed to collaborating and working with the regulators and other stakeholders.
Analysts are of the view that it will take time for Nestle India to win back consumer trust. “We expect Nestle to spend heavily to advertise Maggi, but it will be an uphill task to regain lost market share… Nestle’s growth will remain under pressure post the Maggi relaunch since it will not be easy to win back share. Margins will also remain under pressure due to high ad spends," Abneesh Roy, associate director-institutional equities, Edelweiss Securities Ltd, said in a note.
“We remain positive from a three-year perspective, but medium-term quarterly numbers will be volatile," he added.
In the quarter ended 30 September, Nestle India’s profit fell 60% from the year-ago period to ₹ 124.2 crore on account of lower sales. The net profit came on the back of a ₹ 64.4 crore loss, the first in 15 years, in the three months ended June. That loss was caused by a one-time charge of ₹ 451.6 crore related to the recall of Maggi noodles from the Indian market.
On Wednesday, shares of Nestle India closed 0.21% higher at ₹ 6,247.15 apiece on BSE while the benchmark Sensex was down 0.14% at 26,552.92 points.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
