Almost five months after it was banned, India’s beloved Maggi noodles is likely to return to the shelves.
In a statement on November 4 (pdf), Nestle India – the Indian subsidiary of the Swiss food giant – said that the three laboratories mandated by the Bombay High Court for testing Maggi samples have cleared the product. That means Maggi will probably be back on sale in India by the end of November.
In June, Maggi was banned in India after food safety authorities found dangerous levels of lead and MSG (monosodium glutamate) in the instant noodle. While Nestle India presented multiple reports to prove their product is safe, the Indian government wasn’t convinced. Eventually, the Swiss food giant had to resort to a court case.
While many Maggi-loving Indians are celebrating its imminent return, no one will be more relieved than Nestle India.
Since the fiasco began, Nestle India has seen its sales decline by almost 30% and its profits fall by more than 60%. During the April-June quarter this year, the company reported its first quarterly loss in 15 years.
Revenue fell from Rs 2,431 crore in the April-June quarter in 2014 to Rs 1,957 crore this year, while profits plunged from Rs 287 crore to a loss of Rs 64 crore. Much of that had to do with a one-time cost of Rs 451.6 crore for removing the noodles from the Indian market.
The slide had also continued in the July-September quarter, with revenue further falling to Rs 1,742 crore, although profits somewhat recovered to Rs 124 crore.
The crisis has underscored Maggi’s importance to the fortunes of Nestle India.
The noodles contribute 30% of the company’s total sales and are the second largest revenue contributor after milk products and nutrition, which form 43% of Nestle India’s total sales. The prepared dishes and cooking aid category, which Maggi is a part of, is also the only category to record volume growth last year, according to Nestle India’s annual report.
There’s also been a spillover effect. “The Maggi fiasco has obviously impacted sales of other brands of Nestle in India,” Suresh Narayanan, Nestle’s India’s managing director, said in August this year. The Indian government had even claimed Rs 640 crore from Nestle over “unfair trade practices”.
This article was originally published on qz.com.
In a statement on November 4 (pdf), Nestle India – the Indian subsidiary of the Swiss food giant – said that the three laboratories mandated by the Bombay High Court for testing Maggi samples have cleared the product. That means Maggi will probably be back on sale in India by the end of November.
In June, Maggi was banned in India after food safety authorities found dangerous levels of lead and MSG (monosodium glutamate) in the instant noodle. While Nestle India presented multiple reports to prove their product is safe, the Indian government wasn’t convinced. Eventually, the Swiss food giant had to resort to a court case.
While many Maggi-loving Indians are celebrating its imminent return, no one will be more relieved than Nestle India.
Since the fiasco began, Nestle India has seen its sales decline by almost 30% and its profits fall by more than 60%. During the April-June quarter this year, the company reported its first quarterly loss in 15 years.
Revenue fell from Rs 2,431 crore in the April-June quarter in 2014 to Rs 1,957 crore this year, while profits plunged from Rs 287 crore to a loss of Rs 64 crore. Much of that had to do with a one-time cost of Rs 451.6 crore for removing the noodles from the Indian market.
The slide had also continued in the July-September quarter, with revenue further falling to Rs 1,742 crore, although profits somewhat recovered to Rs 124 crore.
Data: BSE Ltd
The crisis has underscored Maggi’s importance to the fortunes of Nestle India.
The noodles contribute 30% of the company’s total sales and are the second largest revenue contributor after milk products and nutrition, which form 43% of Nestle India’s total sales. The prepared dishes and cooking aid category, which Maggi is a part of, is also the only category to record volume growth last year, according to Nestle India’s annual report.
There’s also been a spillover effect. “The Maggi fiasco has obviously impacted sales of other brands of Nestle in India,” Suresh Narayanan, Nestle’s India’s managing director, said in August this year. The Indian government had even claimed Rs 640 crore from Nestle over “unfair trade practices”.
This article was originally published on qz.com.
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