Nestle stock nosedives.
By Dileep Thekkethil
BENGALURU: The future of Maggi Noodles is getting murkier day by day as four more states have decided to ban the instant noodles after lab tests reported the presence of lead and Monosodium glutamate (MSG) above the permissible levels.
Delhi government was the first to ban Maggi Noodles. Now, Gujarat, Uttrakhand, Jammu and Kashmir, and Tamil Nadu governments have also decided to ban the product. Gujarat and Uttrakhand banned Maggi for 30 days; J&K and Tamil Nadu went a little further and slapped a precautionary ban of 90 days on the popular noodles brand.
Health Minister of Uttarakhand Surendra Singh Negi told The Hindustan Times that “We can’t let someone to play with the health of the people, therefore, the ban.â€
The contamination came to light after the Utter Pradesh government found the excessive content of lead and MSG in the samples of Maggi Noodles collected from different parts of the state. Since then, at least 10 states have sent the sample of the instant noodles brand for the lab test. While Delhi government banned Maggi based on the lab report, the state of Kerala gave a clean chit saying that it couldn’t find harmful elements in the samples collected from two districts.
Striking a heavy blow to Nestle India, who are the makers of Maggi Noodles, came the decision of multi-brand retailers such as Big Bazaar, Walmart and Metro AG to pull stocks of Maggi from their shelves.
News about the contamination and ban has pulled down the shares of Nestle India, with a 10% nosedive on Wednesday. Even as the people share their concerns about their favorite instant noodles, the company is maintaining its product has passed safety tests conducted in internal and external labs that showed “lead levels are well within the limits specified by food regulationsâ€.
According to experts, the consumption of excess lead can cause permanent damage to kidney, bones and the nervous system. They also warn that it is more harmful to children as it might lead to learning disorders. On the other hand, MSG is said to be a slow killer that affects the nervous system with long term use.
Amitabh Bachchan, Madhuri Dixit and Preeti Zinta, who have been brand ambassadors of Maggi Noodles over the past few years, are facing legal action after Sudhir Kumar Ojhaa, a lawyer in Bihar lodged a complaint stating that he fell ill eating Maggi Noodles. If found of spreading false statements about Maggi Noodles, the celebrity endorsers could even be arrested. Adding to this the Utter Pradesh FDI has filed a separate case against all three for promoting a product that is not edible.
Currently, Maggi Noodles brings 30% of the total revenue for Nestle India but, company sources say, as news has spread of the alleged contamination, sales of Maggi has declined 10-35 percent in many regions.
The centre has warned Nestle India that strict action will be initiated if they are found flouting the food safety standards of India. “When I came to know about Maggi issue I directed the department and the FSSAI (Food Safety and Standards Authority of India) to look into the facts and initiate action,” Union food minister Ramvilas Paswan told reporters.
After taking Maggi off its shelves, Walmart spokesperson said, “Given our utmost focus on ‘food safety’ and ongoing concerns around this product, we have withdrawn the Maggi 2-minute noodles from our shelves across all 20 Best Price Modern Wholesale stores.â€
The other states that have sent Maggi Noodles for lab tests include Bihar, Assam, Arunachal Pradesh, West Bengal, Maharashtra and Rajasthan. The centre has also directed FSSAI to collect samples of Maggi from all states for conducting lab tests, which will be crucial in deciding the future of Maggi in India.