Nestlé had to recall and destroy 28,000 tonnes of instant noodles as a result of the ban
Keystone
Nestlé’s Indian arm has reported its first quarterly loss in over three decades, following the Indian food safety authority’s decision to freeze sales of its Maggi brand of instant noodles in June after high levels of lead were found.
This content was published on
2 minutes
swissinfo.ch
According to a company statement released on Wednesday, the net loss for the second quarter (April to June) amounted to INR644 million (CHF9.7 million) compared with a profit of INR2.8 billion the previous year. Overall sales decreased by around 20% during the difficult quarter.
“The company was faced with a very unusual situation during the quarter and the financial results for the quarter are therefore not comparable to previous periods,” the statement said.
Nestlé India admitted that the recall of 28,000 tonnes of Maggi noodles was responsible for the poor quarterly results.
“The Maggi issue disrupted business,” it said, adding that the cost of withdrawing the product from the market had resulted in exceptional costs of over CHF68 million that had a big impact on the bottom line.
Nestlé’s appeal against the ban on sales of Maggi noodles is currently being heard in Mumbai’s High Court. The company is challenging the testing procedure and the manner in which the ban was imposed by India’s food safety body.
Nestlé India has also announced the appointment of a new managing director to turn things around after the Maggi crisis. Suresh Narayanan, formerly CEO of Nestlé Philippines, will officially take charge from August 1.
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Crisis response remains Nestlé’s Achilles heel
This content was published on
Nestlé’s PR response to accusations of lead contamination in its Maggi instant noodles in India has come under fire. This is not the first time.
Nestlé noodle recall in India a logistical nightmare
This content was published on
The company spokesperson told swissinfo.ch that the recall operations began on June 7 and involved five factories, 38 distribution centres and 1,400 distributors. The company estimates that the noodles are sold in 3.5 million retail outlets in India of which half are not serviced by Nestlé’s distributor supply chain, making it tough to recall products. …
This content was published on
India’s food safety authority had ordered Nestlé to recall its noodles on June 5, after levels of lead well above allowable limits were discovered. Nestlé contested the allegations, saying that internal and independent laboratory tests of the product had found that the noodles do not pose a health risk. At a first hearing on Friday,…
This content was published on
India’s food safety body has ordered the testing of instant noodles sold by various companies in addition to Nestlé’s Maggi brand to determine if they are safe for consumption.
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.