The government of India on behalf of consumers, filed a lawsuit against the Indian subsidiary of Nestle over its Maggi noodles, which was found to have monosodium glutamate (MSG) and excess lead by the State of Uttar Pradesh.
India is seeking 6.4 billion rupees or nearly $100 million in damages. Nestle is the first foreign company to face such amount of damage claims in the country. The Swiss food company is also confronting the worst public relations problem in India to date.
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India accused Nestle of unfair trade practices
The Food Safety and Standards Authority of India (FSSAI) said alleged that Nestle India did not comply with food safety laws. The regulator’s lawsuit indicated that the company conducted unfair trade practices, sold defective goods and products without its approval.
The regulator filed the case in the National Consumer Disputes Redressal Commission (NCDRC), a quasi-judicial body. Its rulings are legally binding.
The FSSAI recently issued a press release clarifying that it did not provide any clearance regarding the safety of Maggi noodles even if the Food & Drugs Laboratory of Goa found that the lead in tested Maggi noodles samples was within permissible limits.
According to the FSSAI, Goa’s test results on the samples of Maggi noodles had no bearing on its June 5 recall order because the tested samples were not assumed to be unsafe. Additionally, the regulator noted news reports indicating that Maggi noodles were found to safe in Singapore and United Kingdom. However, Nestle did not share the details of the results from both countries to the FSSAI. According to the regulator, Nestle does not have such information.
An official from the food regulator said, “The Department took exception (given) that Maggi was largely consumed by children and Nestle’s advertisements aimed at popularizing Maggi among children.”
According to the official, the government based its damages claim on the” number of consumers, the size of the market and the number of complaints received.”
Nestle was disappointed with India’s lawsuit
In a statement, Nestle said it was “disappointed with the unprecedented step” of filing the lawsuit. The company reiterated that its Maggi noodles have no MSG.
Nestle emphasized that laboratories in India and other countries tested more than 2,700 samples of Maggi noodles in recent months and found that the level of lead is “far below permissible limits.”
Maggi noodles are very popular in India as a cheap snack particularly among school children and office workers. The noodle is available in many roadside eateries in the country. Nestle recalled the product after the food scare in June.
In May, the regulator in the State of Uttar Pradesh found that the lead in tested samples of Maggi noodles was above the permissible level. Nestle rejected the findings of the state regulator, and emphasized that it is conducting hundreds of tests on its product. Nestle challenged the findings of the regulator in court and demanded a retest on the samples. The results were not yet disclosed to the public.
Nestle India said it was making “making all efforts” to bring back the Maggi noodles to the market. Last month, the company reported losses in the second quarter after suffering a sales decline due to the recall.
“Nestle is a responsible company which has been in the service of consumers in India for over 103 years and has always provided quality and safe products. We have built our reputation on fair dealing with all stakeholders,” according to the company.