Nestle India says it's withdrawing Maggi since recent developments and unfounded concerns have led to an environment of confusion
Mumbai/New Delhi: India’s food safety regulator on Friday ordered Nestle India Ltd to immediately withdraw all nine variants of its Maggi noodles from the market, calling them “unsafe and hazardous" for human consumption. The company, which began withdrawing the products since late Thursday, however, continued to insist that the products were safe.
In an order posted on its website, the Food Safety and Standards Authority of India (FSSAI) directed Nestle India to “stop further production, processing, import, distribution and sale of the said product with immediate effect".
According to FSSAI, Nestle India made three major violations: the presence of lead detected in the product in excess of the maximum permissible levels of 2.5 parts per million (ppm); misleading labelling information on the package reading ‘No added MSG’ (monosodium glutamate); and release of a non-standardized food product in the market—Maggi Oats Masala Noodles with Tastemaker—without risk assessment and grant of product approval.
The FSSAI also asked Nestle India to submit a compliance report in three days and furnish progress reports on the recall process on a daily basis thereafter, till the process is completed.
In a statement late on Thursday, Nestle India said it is withdrawing Maggi noodles since “recent developments and unfounded concerns have led to an environment of confusion".
The FSSAI order was issued even as Paul Bulcke, chief executive officer of Nestle SA, told reporters in New Delhi that tests at an independent laboratory on over 1,000 Maggi noodle packets had found them to be safe.
The Nestle CEO said authorities have not formally shared their test results with the company, adding that the differences in the tests could be due to different testing methods.
“This is a matter of clarification and we need to sit down together and clear the air," Bulcke said. He repeated the company’s stated stance that it does not add lead or MSG to Maggi.
“We withdrew the product (on Thursday) from shelves because consumers’ trust was shaken. We want Maggi noodles back on shelves as soon as possible. Our priority now is to engage all stakeholders to clarify the confusion," Bulcke said. He declined to give any time frame to bring back the product.
On Friday evening, PTI reported that tests by West Bengal and Maharashtra did not find any harmful materials in Maggi noodles. “The state government has not taken any action since nothing objectionable is found," West Bengal chief minister Mamata Banerjee told reporters.
According to Harshdeep Kamble, Maharashtra Food and Drug Administration commissioner, samples were found to contain lead within permissible limits.
Meanwhile, UK’s food safety agency has decided to test a few samples of Maggi noodles, after the developments in India, PTI reported. UK’s Food Standards Agency (FSA), however, stressed that the move was a precaution and there were no concerns over the safety of Maggi products sold by Nestle. “We are currently working with Nestle and the European Commission to investigate a report of higher than expected levels of lead and undeclared MSG in Maggi noodles," said the FSA statement quoted by PTI.
Another PTI report said Singapore has ordered local importers to temporarily suspend the sale of Maggi noodles from India.
At the press conference in Delhi on Friday, Bulcke clarified that the company does not add MSG to Maggi noodles, but conceded that natural substances used as raw material may have MSG in them. He added that the ‘No MSG’ disclaimer will be removed from the product label.
“We will look into the safety concerns. We do not add MSG in Maggi noodles… We apply the same quality standards everywhere. Everything we do is keeping consumers in mind. We will do everything it takes, and are fully engaged with the authorities," Bulcke said.
A communications expert said Nestle needs to display “transparency and responsibility".
“Many consumers are still willing to accept that Nestle may not be at fault— but where’s the evidence from the company? Also, by its nature, responsibility needs a human face, not a press release or an automated tweet. It’s really in the hands of Nestle as to how it manages this crisis and that will either save or ruin the brand," said Dheeraj Sinha, chief strategy officer, South and Southeast Asia, at advertising agency Grey Group.
Mumbai-based brokerage firm CLSA India Pvt. Ltd in a 2 June report said it expects a negative impact on Nestle’s operational performance in the near term, as Maggi noodles contributed more than 20% to its revenues. Worse, the report warned, there could be a spillover effect for other Nestle products.
“While the probe impacts only noodles, this could have an implication even for products like pasta, ketchup, etc., due to common branding. Medium- to long-term impact will be dependent on the final outcome of the probe and Nestle’s strategy to address issues around product safety, change in brand perception," the report said.
Morgan Stanley in a 3 June report warned that the current negative news flow and accompanying bans by state governments are likely to have an adverse impact on Maggi noodles sales in the coming quarters. Prepared dishes and cooking aids was the only category where Nestle India witnessed positive volume growth in 2014, it said.
Nestle India shares fell 0.23% to ₹ 5,997.10 on the BSE on Friday, while the benchmark Sensex fell 0.17% to 26,768.49 points.
Nestle’s troubles started in March last year when a batch of Maggi noodles manufactured in February 2014 was tested as part of a routine, random sampling by the food safety authorities in Uttar Pradesh. The tests, conducted on a dozen samples at the Regional Public Analyst Laboratory in Gorakhpur, found lead content to be 17.2 ppm, higher than the maximum permissible limit of 2.5 ppm. According to Uttar Pradesh Food Safety and Drug Administration, the tests also found MSG in the product, even though the label mentioned ‘No added MSG’.
The test results were challenged by Nestle in July last year, following which the apex central food testing laboratory in Kolkata tested samples and confirmed the results of the Gorakhpur lab. The results of the Kolkata tests came out in April this year, sparking a major crisis for the company. Maggi noodles accounts for 30% of Nestle India’s sales.
Suneera Tandon in Bengaluru contributed to this story.
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