Food Products

Maggi noodles back on sale in India

Victor Mallet
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Nestlé has restarted sales of its popular Maggi instant noodles in India after food safety fears left the company with $77m in direct losses, cost its country chief his job, led to the destruction of 37,000 tonnes of packaged noodles and impoverished thousands of fast-food stall owners and distributors.

"It's a very happy moment for us," said Suresh Narayanan, the India managing director appointed in August to deal with one of the biggest product safety scares in Nestlé's history. "We've been through arguably a very big crisis."

The trouble began in June when the Food Safety and Standards Authority of India banned the production and sale of the Maggi instant noodles that made up nearly 30 per cent of Nestlé's business in the country, on the grounds that tests showed them to be "hazardous and unsafe for human consumption" because of excessive levels of lead.

Nestlé denied there was anything wrong with the noodles, which are sold across India and cooked at roadside stalls dubbed "Maggi points". The company was vindicated by a Bombay High Court judgment lifting the ban and describing it as arbitrary and "a violation of natural justice".

Nestle will persist with EM markets: CEO
Nestle will persist with EM markets: CEO

Tests in other countries, including the US, the UK, Singapore and Australia, and tests performed in India after the court ruling showed the noodles to be safe and suggested that the earlier tests were flawed.

Meanwhile, however, the Indian authorities — never shy of targeting foreign multinationals — raised the stakes with a Ministry of Consumer Affairs lawsuit claiming $100m in damages over Nestlé's alleged misleading of customers with "hazardous, defective and misbranded products".

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The ministry said the phrase, "No added MSG [monosodium glutamate]" on the packets was false, even though Nestlé said that the glutamate occurred naturally in the product and that it had in any case already agreed to remove the phrase from the packets.

"We were always safe, we are safe, we continue to be safe," Mr Narayanan said. "It's been unfortunate that we've been slapped [with] this class action lawsuit." He said Nestlé would defend itself and declined to be drawn on whether the group would launch its own countersuit demanding damages from the government over losses and disrupted business.

Read MoreNestle cuts full-year outlook on Maggi, US rebates

Two of Nestlé's five noodle factories in India are still closed because of state bans in Uttarakhand and Himachal Pradesh, and the relaunch started gradually on Monday with only the "masala" flavour distributed to 100 Indian cities. "The product inside is exactly the same [as before]," Mr Narayanan said.

He expressed respect for the primacy of FSSAI, the regulator, but noted diplomatically that testing for heavy metals required high-tech infrastructure, exacting test protocols and skilled manpower.

"This is an industry-wide issue. Nestlé happens to have been in the eye of the storm," Mr Narayanan said. "There's no victor. There's no vanquished. We stand vindicated in terms of food quality and food safety."