Business | Nestlé in India

Instant karma

Supposedly contaminated noodles can be sold abroad, but not eaten at home

Noodlegeddon
|MUMBAI

IT TAKES only minutes to prepare, but India’s most popular processed-food dish is at the centre of a drawn-out dispute over its safety. On June 30th the Bombay High Court said that Nestlé India was free to export its Maggi brand of instant noodles but a ban on local sales remains in place. The Indian subsidiary of the Swiss food giant was making a second visit to the court to try to overturn the ban, which was imposed by the Food Safety and Standards Authority of India (FSSAI) on June 5th.

Nestlé’s troubles began when a local food-safety agency in Uttar Pradesh state said it had found excessive levels of lead in the noodles. Nestle insisted they were safe to eat but recalled them hours before the ban was imposed, saying the public’s trust had been compromised. Nestlé has so far incinerated 17,000 tonnes of suspect noodles. Rivals such as Unilever have also pulled their instant noodles from the market until the air clears.

The FSSAI told the court it did not object to Nestlé exporting its noodles, although it stood by its earlier decision to ban them in India. This seems a curious decision given that Singapore had lifted a temporary ban on imports of Maggi noodles after its food-standards agency found they were safe to eat; and that Hong Kong had also given Nestlé’s Indian-made noodles the all-clear. On July 1st Britain’s Food Standards Agency said it had tested a batch of Maggi noodles imported from India and found them to be well within European Union limits on lead content, and safe to eat.

Such findings strongly suggest that the tests in India were faulty. But the court has still to decide on that. The hearing was adjourned until July 14th to allow Nestlé to respond to affidavits from the FSSAI and other parties including the Food and Drug Administration (FDA) of Maharashtra, the state where the court sits.

Foreign companies may feel they are being singled out. In 2006 both Coca-Cola and PepsiCo had to fend off claims by environmentalists that their colas contained pesticides. In June KFC, a fast-food chain, dismissed “false allegations” by a children’s-rights group that there were traces of poisonous bacteria in its fried chicken. But the usual beef about India’s industry regulators is not that they are too active but rather that they are ill-equipped to monitor their charges. Satya Prakash, a retired food-safety expert, has warned the government that some of the food laboratories it uses are unable to carry out basic tests. In January 2014 America’s aviation authority downgraded India’s air-safety ranking a notch because its regulator had too few trained officials (the downgrade was reversed in April).

Nestlé might have limited the damage if it had dealt more readily and speedily with the regulators. But it can take comfort from the fact that other foreign food companies have come back from similar adversity. In 2003 the FDA in Maharashtra seized stocks of Cadbury’s chocolates when worms were found in a few bars. Cadbury initially said the infestation could only occur because of careless storage by retailers. The FDA countered that chocolate wrappers should be worm-proof. Cadbury then revamped its packaging and relaunched its products with a heavy advertising campaign. It is now, once again, the leading brand in India.

Investors seem to be betting that Nestlé can likewise restore its reputation. The share price of its local subsidiary, which had slumped by a fifth at its worst point, had recovered about half that loss following the court’s hearing this week. The most regrettable thing about the affair, especially in a country where so many people go hungry, is that in all likelihood a lot of food has been destroyed unnecessarily.

This article appeared in the Business section of the print edition under the headline "Instant karma"

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