Nestle urges Retailers to Step up Maggi Promotions

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KOLKATA: Nestle has directed retailers ‘not to be defensive’ about the controversy over alleged high lead content in Maggi noodles and instead promote its flagship product even as its sales have started to slide across India.

“Please do not panic with the Maggi news” the world’s largest food maker by revenues has written to the organised retail trade, two officials in receipt of the communication said. “The orders to recall the Maggi batch is for February 2014, which anyway would have got expired in November 2014,” Nestle wrote to retailers. “This is an order from the state agency and no central agency has passed any orders,” it said.

The news of lead is yet to be verified in the second test. The amount of any such substance is so small in any food product that even the slightest of error in test results might give incorrect results,” the note said.

In an email response to Economic Times,  Nestle India spokesperson said, “Some recent reports in the media about Maggi noodles are confusing people and we are working to clear the confusion as soon as possible. We are confident of our product and are sharing this confidence with our consumer ..

The two trade officials quoted earlier, however, said sales of Maggi noodles in their national retail chains fell 10-40% last week compared to the previous week. “Sales at stores in metros and bigger cities have been specially impacted because a lot of the current controversy has escalated on social media like Facebook and Twitter,” one of them said.

The other official, representing a leading food and grocery retail chain, said: “Sales first began falling in UP mid last week, but over the last few days, sales of Maggi noodles have gone down consistently, in some cases by 40% across cities.” Maggi has close to 70% share of the Rs 2,700-crore instant noodles category, followed by ITC’s Sunfeast Yippee and Nissin’s Top Ramen.

The brand accounts for close to 30% of Nestle’s sales in the country. National food regulator Food Safety and Standards Authority of India (FSSAI) has initiated sample tests of Maggi noodles across other parts of the country, including Kolkata and Mumbai and Nagpur.

Defending its flagship brand strongly, Nestle said Maggi noodles comply with applicable food and safety laws as well as the company’s own standards of quality and safety before they reach consumers. Its spokesman said Nestle has made a representation to the Uttar Pradesh authorities and has submitted large number of product samples to an independent accredited laboratory to independently evaluate the product.

“We will share the initial results soon and will continue to update as new results are received,” the spokesperson told ET. In its communication to retailers, Nestle urged them not to be defensive if any customer talks about the controversy. “Nestle is a big enough company and will come clean out of it. Please don’t get into any sort of communication or opinion without legal guidance,” it said.

Industry experts, however, say the controversy could have a severe long-term impact on brand trust. “In a case of this magnitude, both parties should make their reports public. In case the authorities have proof that the product in the market is tainted and unsafe, then they will likely initiate a public recall and initiate a probe in the matter,” said Ashwin Bhadri, food auditor and business relations head at Equinox Labs, which works closely with the FSSAI, on compliance issues.

Pankaj Sharma, a consumer rights activist on health and environment issues, said: “The company should invest on aspects of food and consumer safety. The findings of the FDA are glaring and if the company doesn’t work along those lines, it might have a long-term impact on the brand.”

[The report first appeared with The Economic Times]

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