6 Jun 2015
a belated attempt to salvage its reputation, Swiss FMCG major
Nestle on Friday decided to recall its Maggi instant noodles from
the market to end the ensuing confusion in the minds of consumers,
which it said did not provide a conducive environment for the
product to be in the market at this point of time.
The companys group CEO Paul Bulcke flew down to India and
addressed a crowded press conference to reiterate that its products
are safe to consume and that it applies the same quality standards
and the same food safety and quality assurance system everywhere
in the world. We felt unfounded reasons resulted in confusion
and the trust of consumers was shaken, Bulcke said.
Though sales of Maggi in India account for roughly 0.005% of
Nestles global revenue of almost 92 billion Swiss francs
($98.6 billion), Bulcke acknowledged that the recent developments
had damaged its brand and the company was in for a long haul.
If you have confusion there is something wrong with communications.
Thats why we are sitting here, he said.
However, the companys troubles do not seem to end. Even
as Bulckes press conference was on, the food safety regulator,
Food Safety and Standards Authority of India (FSSAI), ordered
the company to recall all nine approved variants of the instant
noodles from the market, terming them unsafe and hazardous
for human consumption. It ordered it to stop further production,
processing, import, distribution and sale of the product with
immediate effect. It even said that Nestle launched the Maggi
Oats Masala Noodles without approval and, therefore, ordered its
recall as the company did not undertake a risk and safety assessment
for the product. The regulator also said that Nestle violated
labelling regulations on taste enhancer MSG and ordered the company
to submit compliance report on its orders within three days.
After reports of presence of mono-sodium glutamate and lead in
excess content in some samples surfaced in Uttar Pradesh around
two weeks ago, till Thursday five states Delhi, Gujarat,
Tamil Nadu, Jammu and Kashmir and Uttarakhand had banned
its sale pending tests in government laboratories. Major retails
chains as well as small eateries had also withdrawn the products
from their stores and menu. However, with the FSSAIs order
on Friday the companys woes are expected to increase and
the crisis may get prolonged.
Referring to the reports of high lead content in tests by certain
government laboratories, the Nestle global CEO said that the company
needed to find out the methodology adopted by the governments
test centres. Denying that the company added MSG in Maggi, Bulcke
said that MSG was found in the product because of natural ingredients
like groundnut oil, onion powder and wheat flour which contain
glutamate naturally. However, to remove any confusion the company
has decided to remove from now on the Contains no MSG
While analysts welcomed the recall of Maggi by Nestle, they questioned
the delay in doing so and even clashing with the regulator and
denying the problem for weeks. If you ask me, everything
that Nestle has done is wrong. In this day and age of social media,
you cannot question the government and consumers, said Arvind
Singhal, chairman of retail consultancy Technopak.
Nestle India should have given higher priority to the
interest of the consumer and should have done a nationwide recall
right at the beginning instead of confronting the situation. In
this case they have managed to lose trust of their consumers.
Nestle India needs to understand that a brand lives on the trust
of the consumer, Devangshu Dutta, chief executive at Third
(With inputs from Sharleen DSouza in Mumbai.)
(Published in Financial