Nestlé’s Indian unit pulled its popular Maggi noodles from supermarket shelves as concerns over levels of lead found in the product triggered investigations by at least six Indian states and a reported import ban by Nepal.
The withdrawal, the company’s largest in India, will last until the current situation is clarified, Nestlé India said in a statement on Friday. The food maker also said accusations of higher than permissible levels of lead in Maggi noodles were “unfounded” and that its products were safe.
The crisis in India comes as Nestlé, the world’s biggest food maker, reported sales declined in its Asia-Oceania-Africa market mainly due to weak performance in China. Nestlé chief executive officer Paul Bulcke is due to address a press conference on Friday in India, where Maggi noodles account for about 20 per cent to 25 per cent of its local sales.
Nestlé needs to “come out aggressively and communicate what the issue is and how they are fixing it,” said Sanjay Manyal, consumer analyst at brokerage ICICI Direct. “If there is any discrepancy in the production process, they need to rectify that.”
Nestlé India fell 0.3 per cent to 5,989.45 rupees as of 11:16 a.m. local time. The shares plunged 12 per cent over the last two days, the biggest such drop in nine years, after India’s states started investigations and resorted to banning sales.
Internal and external tests show that “lead levels are well within the limits specified by food regulations and that Maggi noodles are safe to eat,” Nestlé said in an e-mailed statement Friday. A routine test in April on a pack from a small-town store in India had found the noodles’ seasoning contained too much lead, about seven times the permissible limits.
Maggi noodles have been sold in India for the past three decades. Over-exposure to lead, found in small amounts in the soil, is linked to learning difficulties and even death. Not all of it can be removed by washing or processing, and so many food products contain trace amounts of the metal.
Nepal will ban imports and sales of Maggi in the Himalayan country and advise consumers not to eat the noodles following the controversy in India, the Indo-Asian News Service quoted Uttam Kumar Bhattarai, secretary at the ministry of agriculture development, as saying on Thursday.
Singapore importers have been told to temporarily suspend sales of Maggi noodles from India, Channel NewsAsia reported citing the Agri-Food & Veterinary Authority of Singapore.
Major retail chains including Future Group and Wal-Mart Stores, which operates wholesale stores in India, as well as the army’s canteens have all temporarily halted Maggi sales.
Bloomberg News, edited by ESM
