The Debacle and Revival of Nestlé India’s Maggi
On June 5th 2015, the Food Safety and Standards Authority of India (FSSAI) directed Nestlé India to recall all the nine approved variants of Maggi noodles from the market after finding it unsafe and hazardous for human consumption as well as stop further production.
Maggi Instant Noodles
Nestlé (then Food Specialities Limited) had introduced Maggi 2-minute instant noodles in India in 1982 as a new-generation food product. At that time, the adoption of pre-packaged food products was very small in India. This product had then created a new category, instant noodles, as packaged food in India (Exhibit I).
The Maggi brand built up on the caring working mother image, a mother who was able to provide children with a ‘nutritious and tasty’ meal that could be prepared in just two minutes. The product promotion involved TV spots featuring modern-looking mothers and cheerful active middle class children. Cooked Maggi was distributed free of cost among up-scale schoolchildren. Nestlé organised competitions like the Maggi Quiz among school-kids, where Maggi was freely distributed among winners and everybody present could sample the product during breaks. Nestlé had roped in Indian film stars like Amitabh Bachchan, Preity Zinta and Madhuri Dixit to promote the product by being brand ambassadors. Lately, Nestlé was trying to market to the bottom of the pyramid by focussing on advertisements targeting rural school-going children positioning Maggi as an easy and nutritive alternative meal8, and had created a low unit price packaging towards this strategy.....
Maggi Noodles in Trouble
In the state of Uttar Pradesh in North India, there exists a state government agency Uttar Pradesh Food Safety and Drug Administration (FSDA) for ensuring safety of food products sold in the state. . FSDA collected samples of Maggi Noodles from Barabanki and sent it for testing to the Gorakhpur-based Government Regional Public Analyst Laboratory. The laboratory found the samples to contain MonosSodium Glutamate (MSG) despite the labelling of ‘No Added MSG’. Based on this report, the FSDA sent a notice to Nestlé India..........
Nestlé’s Reaction
Nestlé’s initial reaction at Barabanki FSDA was to ask for cancellation of proceedings. When FSDA persisted, Nestlé asked for the samples to be tested at a reference laboratory when the testing were done at Kolkata Central Food Laboratory that confirmed Gorakhpur RPAL results and further found the samples to contain very high quantities of lead. Analysts at Gorakhpur RPAL pointed out that Nestlé could have gone free by..............
FSSAI’s Findings and Nestlé’s Interaction with FSSAI
FSSAI found three major violations by Nestlé India with regard to Maggi noodles. Presence of lead was detected in the product in excess of the maximum permissible level of 2.5 ppm. There was misleading labelling information on the package of Maggi noodles reading “No added MSG”. Nestlé had released a non-standardised food product “Maggi Oats Masala Noodles with Tastemaker” in the market without...........
“How Can I know if there is MSG in my food?
FDA requires that foods containing added MSG listed in the ingredient panel on the packaging as monosodium glutamate. However, MSG occurs naturally in ingredients such as hydrolized vegetable protein, autolyzed yeast, hydrolysed yeast, yeast extract, soya extracts, and protein isolate, as well as.........
In the Courts of Law
Nestlé India challenged the ban imposed on Maggi noodles by FSSAI in the Bombay High Court, praying for a stay on the FSSAI order. The court initially refused to grant a stay on the ban order. In later hearings, the points put forward by Nestlé India to a two-judge bench of the Bombay High Court were that FSSAI had prejudged the issue. FSSAI (and Maharashtra FDA that had also banned Maggi noodles in Maharashtra) had not issued..............
Maggi’s Brand Ambassadors
Noted Indian film stars Amitabh Bachchan, Preity Zinta and Madhuri Dixit have been brand ambassadors for Maggi noodles. Due to the Maggi controversy, a court in the Indian state of Bihar ordered an FIR to be filed against the three brand ambassadors. The three actors are already facing a similar case in a Barabanki court in Uttar Pradesh..........
Related Happenings
While there was not much explicit response from competing brands of instant noodles in the press, all except ITC’s Yippee noodles were missing from the shelves. Several retailers at IIT Kharagpur Tech Market revealed that except for ITC, all other brands had also called back their stocks and had put further supplies on hold. ITC claimed..........
Assignment Questions
I. List the stakeholders in the case. How did the ban on Maggi affect each of them?
II. What were the options for acting open to Nestlé India, FSSAI and the brand ambassadors of Maggi Noodles? Examine their actions in keeping with the various ethical theories.
III. .............
Exhibits
Exhibit I: Excerpts from Nestlé India Code of Business Conduct
Exhibit II: Product Label of Variants of Maggi Noodles
Exhibit III: International Tests of Maggi Noodles Reported by Nestlé India