Ban on Maggi in India hurts Nestle: Global net dips 2.5%

Swiss FMCG major Nestle reported 2.5% decline in its consolidated net profit at 4.51 billion Swiss francs for the first half of 2015 reportedly due to the ban on Maggy in India.

Nestle said its consolidated sales were also down marginally at 42.84 billion Swiss francs in the first half of the year as against 42.98 billion Swiss francs in the year-ago period.

What did Nestle say?

Sales and trading operating profit margin in Asia, Oceania and sub-Saharan Africa was affected by the withdrawal and destruction costs of the returned products in India, which have already had a material impact in the first half of the year.

Ban on Maggy

1. In May 2015, Food Safety Regulators from Uttar Pradesh, India found that samples of Maggi 2 Minute Noodles had unexpectedly high levels of monosodium glutamate, as well as up to 17 times the permissible limit of lead.
2. On 3 June 2015, the New Delhi Government banned the sale of Maggi in New Delhi stores for 15 days due to these findings.
3. On June 4, 2015, the Gujarat FDA banned the noodles for 30 days after 27 out of 39 samples were detected with objectionable levels of metallic lead, among other things.
4. Assam had banned sale, distribution and storage of Maggi’s “extra delicious chicken noodles” variety for 30 days since June 4, 2015 after tests carried out at the state public health laboratory concluded the particular variety to contain added MSG and excessively high lead content.
5. Some of India’s biggest retailers like Future Group which includes Big Bazaar, Easyday and Nilgiris have imposed a nationwide ban on Maggi.
6. Thereafter multiple state authorities in India found an unacceptable amount of lead and it has been banned in more than 5 other states in India.
7. On June 4, 2015 the government of Tamil Nadu also banned maggi due to unacceptable amount of lead and other components.
8. On June 5 the Andhra Pradesh Government Banned Maggi.
9. On June 5, 2015, Food Safety and Standards Authority of India (FSSAI) ordered a recall of all nine approved variants of Maggi instant noodles and oats masala noodles from India, suggesting them unsafe and hazardous for human consumption.
10. On the same day, Food Safety Agency of United Kingdom launched an investigation to find levels of lead in Maggi noodles.
11. On June 6, 2015 the Central Government of India banned nationwide sale of Maggi noodles for an indefinite period.
12. Nepal indefinitely banned Maggi over concerns about lead levels in the product.
13. Maggi noodles has been withdrawn in five African nations- Kenya, Uganda, Tanzania, Rwanda and South Sudan by a super-market chain after a complaint by the Consumer Federation of Kenya.
14. It was revealed later that the United States Food and Drug Administration (FDA) had refused import of the noodles in January 2015 on grounds similar to the reasons for ban in India.
15. Ironically, the Bombay High Court allowed the export of Maggi while the ban in India remained.
16. FIRs against Bollywood Maggi Brand Ambassadors Amitabh Bachchan, Madhuri Dixit & Preity Zinta were lodged at a local court, asking the authorities to arrest them if required.