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Tuesday, October 26, 2021

Nestle had a big loss due to MSG spoiling the taste of Maggi’s business

Since the launch of Maggi Noodles in the country in 1982, it has become the first choice of quick meal. From eye-catching commercials to colorful packaging, it is one of the most popular brands in the country. Its brand ambassadors have included superstars from Bollywood, from Amitabh Bachchan to Madhuri Dixit.

As of 2015, Maggi accounted for 63 per cent of the country’s Rs 5,000 crore noodles market.

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The brand has been a huge success in many other countries as well, with over five billion packets sold each year.

However, in April 2015, Maggie suffered a major setback. It started a year ago when a food inspector of the Food Safety and Drug Administration department of the Uttar Pradesh government sent a sample packet of Maggi to check claims on the label for non-conjugation of monosodium glutamate (MSG). MSG is a common amino acid used to enhance the flavor of Chinese food.

The result of Maggie’s sample was shocking. MSG was found in this sample contrary to Nestle’s claim. Further investigation also found high levels of lead in Maggi.

A notice was sent to Nestle regarding this and the company responded with its data saying that Maggi Noodles is completely safe for consumption and there is no question of recalling it.

The Food Safety and Standards Authority (FSSAI) in June 2015 directed Nestle to recall Maggi noodles after the matter came to the limelight.

The company reiterated its claim that the noodles are safe, but due to regulatory pressure, it had to recall Maggi from the market. In the next one month, thousands of packets of Maggi were withdrawn from the shops.

After this, Nestle appealed to the Bombay High Court and sought a judicial review of the ban imposed by FSSAI. The court allowed export of Maggi noodles from the country but upheld the ban on its sale in the country.

Food regulators in Britain and some other countries have declared Maggi noodles manufactured in India as safe. Many states have also allowed the product and in August 2015 the Bombay High Court lifted the ban on Maggi noodles.

However, during this time the company suffered a loss of crores of rupees and its image also suffered. Under the new CEO, Suresh Narayanan, the company has regained a substantial part of its market share. However, the company still faces legal difficulties.

The Supreme Court had two years ago allowed the National Consumer Disputes Redressal Commission (NCDRC) to proceed with the case against Nestle.

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Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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