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Maggi Saga Has Happy Ending, But Has The Government Learned A Lesson?

17/11/2015 8:40 AM IST | Updated 15/07/2016 8:25 AM IST
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Packets of Maggi 2-Minute Noodles, manufactured by Nestle India Ltd., are arranged for a photograph in New Delhi, India, on Monday, June 15, 2015. Nestle SA said the U.S. Food and Drug Administration is testing samples of imported Maggi noodles after the worlds largest food company halted sales in India when regulators said they contained unhealthy levels of lead. Photographer: Kuni Takahashi/Bloomberg via Getty Images

A pall of gloom descended in many households in India when the Swiss major Nestlé was compelled to withdraw Maggi noodles from the market. It was as if a small but essential component of our lives suddenly went missing, and no one rued the lack of Maggi any more than children and busy people - from housewives and working women to bachelors and students - who relied on it for a quick fix menu.

It all started when an overenthusiastic technician in an Uttar Pradesh laboratory found the lead content in Maggi to be seven times higher than the permissible limits. The news spread like wildfire all over India, and the product was tested in many states with the same result. Many states banned all the nine varieties of Maggi. In addition, the Delhi government not only confirmed the UP test results, but also found Monosodium Glutamate (MSG) in the product. Nestlé was forced to admit the presence of MSG, and agreed to remove the "No added MSG" from the label.

"[T]he 'unsafe' stamp will tarnish India's image... Stringent, reliable testing will also ensure that the food we do eat is genuinely safe."

The withdrawal of Maggi took an immediate toll on Nestlé, with consolidated net profits dropping by 60% for the quarter ending in September 2015. Maggi accounts for about 30% of Nestlé India's revenue and the company was left reeling.

In the meantime, Nestlé took the matter to the Mumbai High Court, which, while admitting the petition, directed Nestlé to get the samples tested at three government-accredited laboratories in Jaipur, Hyderabad and Mohali. All the three labs found the lead content to be well within the permissible limits. The Mumbai High Court, taking cognizance of the test reports, overturned the ban imposed by the Food Safety and Standards Authority of India (FSSAI), in August this year. The high court observed that the ban on the nine varieties Maggi noodles was made on the basis of flawed tests , amounted to a breach of natural justice.

Earlier, Vodafone, a British major, had taken the central government to court over an effort by India's tax authorities to raise its liabilities by hundreds of millions of dollars. It was the Mumbai court that came to its rescue. The same court ruled last year ruled in favour of Shell over a similar claim. As the Indian Prime Minister is pitching for Foreign Direct Investment in India, and also encouraging the foreign investors, to set up manufacturing hubs in India, such arbitrary decisions will dampen the foreign investors from investing in India.

In view of the Mumbai court verdict in its favour, Nestlé has decided to partner with Snapdeal for the rollout of noodles. "Your favourite Maggi noodles are now back. Delighted to hand over Maggi Noodles to consumers to whom it belongs," Nestlé India tweeted. It was a moral victory for a company that has been in India for over 100 years, and enjoys an enormous reputation in the country for its quality products.

Maggi will now be available throughout India, except in Bihar, Odisha, Manipur, Nagaland, Tripura, Punjab, Himachal Pradesh and Uttarakhand, where the company is yet to secure the requisite clearances. It is only a question of time until these states, too, will be forced to lift the ban because of consumer pressure.

However, the whole unfortunate episode with Nestlé raises one important question that requires an immediate answer: Are the testing standards in India so poor and unreliable that three government-accredited labs was presented different results for the same product?

This assumes significance when the USA, UK, Singapore and Australia, which have very stringent food safety standards, found Maggi Noodles exported from India to be safe for consumption. As there is no clear answer, it rests on the Government of India to take steps to re-examine the laboratories we have today and take steps to have world-class testing facilities that will avert the possibility of unnecessary bans. After all, unless there is truly a good reason, the "unsafe" stamp will tarnish India's image, especially when our Prime Minister is going all over the world to attract foreign investment in India. Stringent, reliable testing will also ensure that the food we do eat is genuinely safe -- in 2003, the Centre for Science and Environment (CSE) found a high level of toxic pesticides and insecticides in soft drinks.

These issues apart, many Indian consumers are overjoyed with Maggi's return, given how handy it is for a quick meal and how easily it can be made more wholesome with the addition of vegetables, cheese and so on. One thing is for sure, achche din are back for children and parents struggling to make the time to cook complicated meals.

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