Nestlé India sales drop 20% after Maggi recall

By Joseph James Whitworth contact

- Last updated on GMT

Picture: Nestlé Quality Assurance Centre, Moga, Nestlé India
Picture: Nestlé Quality Assurance Centre, Moga, Nestlé India

Related tags: Maggi noodles, Monosodium glutamate

Nestlé India’s net sales plummeted 20.1% in the second quarter largely due to the Maggi noodles scare.

The firm made a net loss of 644 million rupees (€9.2, $10m) in the three months ending 30 June.

It said the ‘very unusual situation’ during the quarter meant results are not comparable to previous quarters.

Sales fell to 19.3bn rupees and exceptional items, which relates to loss estimates on withdrawn stock, was 4.52bn rupees.

Nestlé India removed products from shelves on the same day as the Food Safety and Standards Authority of India (FSSAI) issued a ban and recall (June 5) but has repeated they are safe to eat.

The noodles were banned by the FSSAI for exceeding permitted lead levels and containing monosodium glutamate (MSG) not mentioned in the ingredient panel.

Ongoing hearing

The Bombay High Court is currently hearing the case and Nestlé India told us it would await judgement before commenting but added there had been no ruling to retest the noodles as some local media reported.

FSSAI said lead was found in excess of maximum permissible levels of 2.5ppm from samples by Utter Pradesh and CFL, Kolkata who found presence at 17.2ppm.

Nestlé India said it had tested 1,676 samples at its own laboratory in India and affiliate lab abroad and 1,100 samples at external labs in India and abroad with all results showing lead levels below the regulatory limit.

Suresh Narayanan, managing director of Nestlé India, said the quarter had been ‘extremely challenging’.

“Nestlé India would like to reassure consumers that our products are safe. Consumer trust is and will always remain the cornerstone of Nestlé. Nestlé India is making all efforts and will continue to engage with authorities to bring Maggi noodles back on the shelves.”

Change of MD

Narayanan was named as managing director last week with effect from 1 August. He replaced Etienne Benet, who was relocated to the Nestlé head office in Switzerland.

Narayanan joined the Nestlé Group in 1999 in India and was chairman and CEO of Nestlé Phillipines.

Nestlé India has eight factories in India, five produce Maggi Noodles, and 38 distribution centres where products are stored. From these centres it sells to 1,400 distributors.

The withdrawn products were sent for high temperature thermal destruction. The packs are mixed with fuel and subjected to this treatment in cement kilns.

Export sales decreased by 12.7% impacted by lower coffee exports to Russia, partially offset by milk and nutrition products to Bangladesh.

Nestlé India was given the all clear to export Maggi noodles by the Bombay High Court at the end of June.

It exports to Canada, UK, Singapore and Kenya and to third parties in the US, Australia and New Zealand.

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