Indian court overturns Maggi ban & orders new tests

Nestle has been selling the Maggi noodles in India for over three decades and before the ban last June, had an 80% market share in the country.

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Written by Syndicated News
MUMBAI — August 13, 2015: An Indian court today overturned a government ban on Nestle’s hugely popular Maggi noodles brand, but ordered further tests before the product can go back on sale.

The court backed Nestle’s challenge against the nationwide ban ordered by India’s food safety watchdog in June, calling it arbitrary and saying it violated the principles of national justice.

Tests by some Indian states had found lead levels in the product exceeded statutory limits, but the Swiss food giant has always maintained it is safe to eat, and has continued to sell it in other countries.

“We have examined the evidence in great detail,” Justice Vidyasagar Kanade told the high court here.

“Since the petitioner Nestle has already agreed not to make and sell Maggi until the food authorities are satisfied, we see no reason to allow any relief to food authorities.”

The court ordered Nestle to send samples for testing to three laboratories and said it would only be allowed to restart making and selling Maggi noodles in India if the results were satisfactory.

Nestle said it would comply with the order, and wanted to get Maggi noodles back on the shelves as soon as possible.

‘Perception counts’ 

Shares in Nestle India rose around six per cent after the ruling, which came a day after India said it was seeking damages of nearly $100 million from the company for unfair trade practices.

The government filed a complaint with the National Consumer Disputes Redressal Commission seeking 6,400 million rupees in damages.

In response, Nestle said its noodles went through stringent testing at laboratories both in India and abroad.

“Each one of these tests have shown lead to be far below the permissible limits,” it said.

The company also said it does not add monosodium glutamate (MSG) to its products, and that the substance occurs naturally in many ingredients.

The government’s food safety watchdog had said traces of MSG were detected in Maggi noodles and criticised the company for failing to include the substance in the list of ingredients.

Nestle has sold its Maggi noodles for over three decades in India, and had 80 per cent of the country’s instant noodle market before the ban.

It emerged as one of India’s five most trusted brands in a consumer survey conducted last year and has been endorsed by celebrities including Bollywood superstar Amitabh Bachchan.

According to Brand Finance, a consultancy firm, Maggi is set to lose over $200 million in brand value following the setback in India.

Maggi was previously valued at $2.4 billion, Brand Finance said, adding that it had ranked the noodle manufacturer as the 23rd most valuable food brand in the world.

Nestle chief executive Paul Bulcke told AFP in June the brand was 100 per cent safe, and he was working to get it back on Indian shelves as soon as possible.

“One can have facts on one’s side but it’s the perception that counts,” Bulcke said, explaining the company’s decision to withdraw and destroy the product in India.



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