Bombay HC allows Nestle to export Maggi noodles, India ban continues

Court to take up the matter for hearing on July 14

In some relief to the Indian subsidiary of Nestlé, the world’s largest food maker, the high court here has allowed it to export Maggi noodles, even as a ban on selling the item within the country continues. A Bench comprising judges V M Ranade and B P Colabawalla said the company was free to export the noodles, subject to compliance with rules and health and food safety standards. The court will take up the matter again on July 14.

The relief for Nestlé India comes after the country’s apex food regulator, the Food Safety and Standards Authority of India (FSSAI), said it had no objection to the company selling the product abroad, though it stood by its decision to ban nine variants of the instant noodles in India, an order it had passed on June 5. The order had also sought Nestlé withdraw all variants of Maggi from the marketplace. This led to the largest product recall in India.

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It is expected the recall will be completed by the end of July. So far, 57 per cent, or 17,000 tonnes of Maggi noodles, have has been sent to 11 cement plants to be destroyed. Nestlé has pegged the total inventory to be destroyed at about 30,000 tonnes, against its earlier estimate of 27,420 tonnes. Value-wise, it has pegged the overall loss on account of recall and destruction at Rs 320 crore.

The ban and the subsequent recall saw $200 million shaved off Maggi’s brand value (Brand Finance pegs Maggi’s current brand value at $1.2 billion), prompting the company to move the high court here to put a stay on the FSSAI order, terming it arbitrary and illegal. In a hearing on June 12, however, the court gave no relief to Nestlé; it directed the FSSAI and other respondents to explain in detail what led them to issue a ban.

During Tuesday’s hearing, Igbal Chagla, counsel for Nestlé, said the ongoing recall was a waste of food, as the company had found Maggi to be safe. Appearing on behalf of the FSSAI, advocate Mehmood Pracha contended the Maggi samples tested were found to contain high levels of lead. “If the company claims its product is safe and it follows safety standards, let them export it instead of destroying it. Why don’t they export? Why put the blame on us?” he asked.

In response to Nestlé’s plea to stay the recall and ban of Maggi, four affidavits were filed in the high court, including those by the FSSAI, the Maharashtra government and the Maharashtra Food and Drug Administration.

The FSSAI’s 60-page affidavit had said the crisis had arisen because the company had failed to adhere to its own declared policy and principles. The company’s claims of having in place “strict food safety and quality control at all Maggi factories” were “incorrect”, the FSSAI affidavit said. “If for the sake of argument, it is presumed all the safety claims regarding its manufacturing activities and processes are true, the widespread presence of lead, a known poison, in its products can only be presumed to be intentional. It is impossible that such high levels of lead can escape the scrutiny of a reasonably well-equipped laboratory,” the FSSAI said.

In its affidavit, the FSSAI added Nestlé was given a hearing in response to its contention that the principles of natural justice were violated. The FSSAI also said it was well within its powers to issue a ban and recall order, under the Food Safety and Standards Act, 2006.