1. Nikunj Lahoti Researchpaper oncontroversy aroundMaggi
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INTRODUCTION
This paper seeks to provide an overview about the controversy surrounding Maggi India in 2015 and
it focuses on the viewpoint of Food Safety & Standards Authority of India, Food and Drug
Authority and Nestle. Firstly, the paper highlights the unfolding of events that led to the widespread
ban on Maggi. Secondly, it focuses on the laws allegedly violated by Nestle and viewpoints of
different stakeholders on this. Thirdly, it talks about the lawsuit filed on Nestle by FSSAI claiming
Rs.640 crore in damages and the counter case filed by Nestle in Bombay High Court against FSSAI
and others. Lastly it tries to delve into prospective marketing and legal strategy that can be adopted
by Nestle to overcome the controversy and reestablish its product in the market.
ABSTRACT
The controversy began in January 2015 when State Food Laboratory, Gorakhpur, UP found MSG
content in packets of Maggi. Thereafter sample was sent to referral laboratory at Kolkata which,
after 3 months gave a report in which it was also found that the lead content was 17 ppm which was
much higher than the permitted lead content of 2.5 ppm. FSSAI conducted tests in various states
among which 7 state test results revealed lead content above permissible level. On 5th June 2015
FSSAI asked Nestle to recall 9 variants of Maggi [1]. Thereafter Nestle filed a petition in Bombay
High Court against the order passed by FSSAI and FDA Maharashtra.
ALLEGATIONS BY FSSAI
FSSAI asserted that Nestle violated Section 26 of the Food Safety and Standards Act 2006 under
which it is found that (a) lead is present in excess of maximum permissible limit of 2.5 ppm [2], (b)
company used misleading labeling information on the package reading “No added MSG” [3], and (c)
company released non- standardized food product in the market viz., “Maggi Oats Masala Noodles
with Tastemaker’ without risk assessment and grant of product approval [4].
A. Presence of Lead inexcess of the permissible safety limits:
Under FSS (containments, toxins and residues) Regulations, 2011, Chapter 2, Section 2.1.1[5]
lead content in ‘food not specified’ category must not be more than 2.5 ppm. FSSAI on the basis of
test reports of several laboratories alleged that lead content is around 17 ppm and hence the product
is unsafe and hazardous for human consumption.
[1]http://indianexpress.com/article/india/central-food-safety-regulator-fssai-orders-nestle-to-recall-9-maggi-noodle-variants-from-india/
[2]http://www.fssai.gov.in/Portals/0/Pdf/Food%20safety%20and%20standards%20(contaminats,%20toxins%20and%20residues)%20regulation,
%202011.pdf
[3] http://fssai.gov.in/Portals/0/Pdf/Adviosry_on_misbranding_&_misleading_claims(04-07-2012).pdf
[4] http://www.fssai.gov.in/Portals/0/Pdf/Order_Nestle.pdf
[5]http://www.fssai.gov.in/Portals/0/Pdf/Food%20safety%20and%20standards%20(contaminats,%20toxins%20and%20residues)%20regulation,
%202011.pdf

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Nestle claimed that Maggi should be tested for lead as a combined end product, or the form in
which it is finally consumed i.e. Maggi noodles along with tastemaker. However FSSAI argued that
Tastemaker or Masala is always in a separate sachet placed inside the main packet hence prescribed
standards should be applied independently to both the components.
B. Violationof labeling related Regulations:
Section 2.2.1 of FSS (Packaging & Labelling) Regulations, 2011[6]
states that Pre-packaged food
shall not be described or presented on any label or in any labelling manner that is false, misleading or
deceptive or is likely to create an erroneous impression regarding its character in any respect.
FSSAI alleged that label of the said product specifically mentions “No Added MSG” whereas the
product is found to be containing Mono Sodium Glutamate (MSG). Against this Nestle argued that
they have been declaring no added MSG as they do not add MSG (flavor enhancer-E621) [7]
as an
additive in the product. However the product contains glutamate from hydrolyzed groundnut
protein, onion powder and wheat flour which produces a positive result in a test for MSG.
FSSAI claims that Nestle indulged in unfair trade practice as such labelling is not required and this is
done to gain an undue commercial advantage/ benefit to create an erroneous impression in the
minds of consumers regarding the character of the product.
C. Maggi Oats Masala Noodles withTastemaker
Above stated product being a propriety food in nature requires risk/ safety assessment before being
manufactured and placed in the market under section 26 of the FSS Act 2006. Nestle launched the
product without any approval from FSSAI [8].
LAWSUITS AGAINST NESTLE
The consumer affairs department filed a class action suit under section 12(1)(d) [9]
of the
Consumer Protection Act 1986 against Nestle with the National Consumer Disputes Redressal
Commission (NCRDC) seeking Rs.284.55 crore (10% of 2014 Maggi noodles sale) as penalty and
Rs.355.41 crore (profit from 2014 Maggi noodle sale) as punitive damages for gross negligence,
apathy and callousness making total of Rs.639.96 crore [10]
to be deposited in Consumer welfare
Fund. Along with the fine Nestle has to also deposit 18% annual interest on this amount till actual
payment is made. The grounds for this case have already been mentioned above in the allegations
sections.
[6]http://www.fssai.gov.in/Portals/0/Pdf/Food%20Safety%20and%20standards%20(Packaging%20and%20Labelling)%20regulation,%202011.p
df
[7] https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-msg
[8] http://www.fssai.gov.in/Portals/0/Pdf/FOOD-ACT.pdf
[9] http://indiankanoon.org/doc/1891987/
[10] http://www.hindustantimes.com/india-news/government-seeking-rs-640-crore-in-damages-from-nestle/article1-1379021.aspx

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NESTLE CHALLENGES FSSAI IN BOMBAY HIGH COURT
Nestle challenged the ban imposed on its products by FSSAI in Bombay High Court (BHC) [11]
based on the following grounds:-
1) The ban imposed on its products was in complete violation of principles of natural justice since
any show cause notice was not issued and also any particulars were not given on the basis of which
they pass the orders.
2) The laboratories in which testing was done did not compiled with the Section 43 of FSS Act
2006 which clearly states that the analysis of food samples be carried out by agencies accredited by
National Accreditation Board for Testing and Calibrations laboratories.
3) The tests were conducted extensively on over 1000 batches of Maggie noodles at its own
accredited labs, complimented by tests on over 600 batches at external laboratories which found
noodles safe for consumption[12]
.
BOMBAY HIGH COURT VERDICT
On 13th August 2015 hon’ble Bombay High Court passed a verdict quashing the FSSAI order dated
5th June 2015 [13]
. The key highlights of the verdict included following points:-
S.
No.
Description of issue Observation of Bombay High Court Whether in
favor of
Nestle or not?
1. Nestle sold goods hazardous to
life and society
The court observed that no proper risk
analysis and/or investigation was done to
gauge the ill effects of consumption of said
product on general well-being and health of
public at large
Yes
2. Nestle mislead consumers
about presence of MSG
Misbranding of a product cannot be a
reason for banning the product indefinitely,
since the maximum penalty for such an
offence is Rs.3 lakh only under the section
52 of FSS act.
Yes
3. Lead was present in Maggi
below permissible limits but
The food laboratories where the samples
were tested were not accredited and
Yes
[11] http://sahdevgroup.ac.in/bhc-rules-in-favour-of-nestle-in-maggi-ban-case/
[12] https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-safe
[13] http://www.legallyindia.com/Bar-Bench-Litigation/bombay-hc-rules-for-maggi-fssai-acted-arbitrarily

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more than what was
represented by Nestle while
applying for product approval
recognized Laboratories as provided under
the Act and therefore no reliance could be
placed on the said results.
4. All the nine products variants
of Maggi were banned
There was no plausible explanation given as
to why all the nine variants of Maggi were
banned even though lead was alleged to be
found in excess of permissible limits in only
three variants while other six were even not
tested.
Yes
5. The ban on the product was
arbitrary and implemented in
haste.
In this case, Nestle was not given a personal
hearing and the product in question was
banned even after it was being withdrawn
from market on 4th June2015, which was in
violation of Article 14 and 19 of
Constitution of India.
Yes
6. There were suppression of
facts on the part of Nestle and
it attempted to destroy the
evidence by destroying packets
of Maggi
The court observed that the required
annexure was not present with Nestle on
date of filing of petition. Furthermore, it
also observed that order for destruction of
Maggi packets was given and signed by The
Chief Executive Officer, The Food Safety
and Standards
Authority of India. Nestle also complied
with the order of preserving 750 packets of
Maggi for future purposes.
Yes
In its verdict BHC asked Nestle to send 5 samples of each batch which are in their possession to 3
NABL accredited laboratories. The samples shall be tested and analyzed and if the results show that
lead is within permissible limits then Nestle would be permitted to manufacture and sell its products.
WHAT SHOULD MAGGI DO NOW?
Legal Strategy
For Nestle, the cost of ban has been huge. Maggi, the nation’s most popular noodle brand, ranked in
more than Rs.2000 crore in annual revenue of the company. While that has stopped now, it spent
Rs.320 crore to recall the product. Global valuation consultancy Brand Finance estimates another
Rs.1270 crore in brand loss.

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If everything turns out in favor of Nestle and Maggi is being cleared by competent authorities then
Nestle can file a lawsuit against Government of India on the grounds of wrong allegations charged
against it and wrong use of power by FSSAI claiming Rs.11359 crore on below mentioned criteria.
Nestle’s financial claim on GOI
S. No. Basis of claim Claim Amount
1 Expense on recalling the product Rs.320 crore
2 Estimated loss in brand value Rs.1270 crore
3 Future cost to be incurred in re-marketing Maggi Rs.450 crore
4 Loss suffered in market capitalization Rs.9319 crore
Total Claim Rs.11359 crore
Market Strategy
Controversy surrounding Maggi had a huge impact on its brand value, investors’ confidence,
customers’ perception and its reliability as a provider of safe and healthy food product. So Nestle
should adopt following measures to reestablish itself:-
1) It needs to rebuild the perception of consumers about its product as healthy, tasty products of
highest quality. Like it has started ‘We Miss You Maggi’ campaigns, it can further take help of social
networking and also sign up a credible endorser.
2) Promoting safe and healthy eating habits should be included in its corporate social responsibility
programs.
3) Nestle has hired APCO worldwide as its marketing agency which has previously proved its mettle
in previous controversies such as Johnson and Johnson’s etc.
4) They should open doors of its production facilities to scrutiny to prove the quality of their
product and to portray a more transparent position in its ingredient.
CONCLUSION
In conclusion we can say that in this entire episode, Government has over reacted and Nestle has
under reacted. Government should have first given notice demanding explanation regarding alleged
presence of lead and MSG rather than out rightly banning the product. On the other hand, Nestle
should have used social media to handle the issue in a more proactive and transparent way. After
high court has given its verdict in favor of Nestle, now Nestle should relaunch its flagship product
and regain consumer trust.