Both Nestlé and Unilever in India have been forced to remove high-yielding seasoning products due to food safety concerns instigated by Food Safety and Standards Authority of India (FSSAI) relating to high levels of lead in some noodle packs.
Maggi, which is a subsidiary of the Nestlé group, was the first to recall its noodles, on 5th June. In a statement, the company said: “Nestlé India reconfirms that MAGGI Noodles in India are safe. In spite of that, Nestlé India has decided to take the product off the shelves nationwide in view of recent developments and concerns around the product, which has led to an environment of confusion for the consumer. This, Nestlé believes, does not provide a conducive environment to have the product in the market, at this moment.
It continued: “Responding to the recent concerns around lead, Nestlé has conducted extensive, additional tests on over 1000 batches of MAGGI Noodles at its own accredited labs, complimented by tests on over 600 batches at external laboratories. All results indicate that MAGGI Noodles are safe and well within the regulatory limits established in India. Nestlé has shared these results with the authorities, as well as with the broader public online.”
The company also confirms that it does not add MSG (E621) to its MAGGI Noodles in India, as stated on the label. As some ingredients like groundnut protein, onion power and wheat flour contains glutamate naturally, this may have led to the confusion and as such Nestlé has decided to remove the specific mention of “No Added MSG” from the label.
Analysts at Brand Finance estimate that Maggi is set to lose over US$200m in brand value following the FSSAI ban. Maggi will destroy US$50m worth of noodles which have been branded “unsafe and hazardous” after the FSSAI discovered “higher-than-allowed levels of lead” in some noodle packets.
Maggi’s brand was valued at $2.4bn prior to the food safety ban, which ranked the noodle manufacturer as the 23rd most valuable food brand in the world. However, Brand Finance analysts have calculated that the $50m loss of goods combined with a damaged brand, results in a reduced brand value of $2.2bn.
Brand Finance CEO, David Haigh, comments “Any health concerns raised by a credible source such as the FSSAI will most certainly damage customer loyalty and consideration of a food brand. As Maggi’s parent company, Nestlé will have to turn around swiftly to ensure that the Maggi brand can retain its dominance in the Indian market. If not, the Nestlé brand itself could be at risk as the Nestlé logo prominently features on the back of Maggi noodles packaging, making it synonymous with the Maggi brand.”
Nestlé has decided to challenge the high court whilst also raising “issues of interpretation” of India's food safety laws.
Last week, Hindustan Unilever Ltd (HUL) assured consumers that while all of its products meet the highest quality and safety standards it discontinued the manufacturing and sale of its Chinese instant noodles.
The company said that all food products of HUL, including its Chinese range of instant noodles, abide by the highest quality standards and are safe for consumption. HUL follows a strict quality management system and regularly monitors products for compliance to regulations.
All HUL food products are regularly tested at Food Safety and Standards Authority of India (FSSAI) approved laboratories in addition to complying with strict internal quality standards. All suppliers are periodically audited by external accredited auditing agencies. As a responsible manufacturer and to reassure consumers, HUL has last week conducted additional testing of its noodles range of products from external FSSAI approved laboratory. All these tests show that the Chinese noodles range of products are safe for consumption and continue to meet all regulatory norms.
HUL had submitted an application with FSSAI for product approval for the Knorr Chinese range of instant noodles in February 2015 and the same is pending approval. In conformance with the FSSAI advisory to State FDAs dated June 8, 2015 with regard to product approvals, HUL has decided to stop production and sale of its Chinese range of instant noodles till such time as its application is approved by FSSAI. HUL is initiating a withdrawal of its Chinese instant noodles from the market.
The discontinuance of manufacturing and sale of Chinese instant noodles is not on account of any safety or quality concerns. The Chinese instant noodle range uses ingredients which are permitted under the FSS Regulation, 2011/Codex and safety of these ingredients is well established. Details of the same have been shared with FSSAI as part of the product approval application. HUL continues to engage with FSSAI to secure the approval of this range so as to make these products available at the earliest for its consumers.
