Maggi ban sent disturbing message to investors: Swiss envoy

Says the message was disturbing in the sense that the regulatory framework is not clear enough

The ban on Maggi noodles sent out a “disturbing message” to Switzerland's enterprises, raising questions about the implementation of India's regulatory framework, Swiss Ambassador Linus von Castelmur said today.

Maggi, a popular noodles brand which has been in India for many decades, is manufactured by Swiss multinational Nestle through its Indian subsidiary.

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It was back on the shelves from November 9 with the Bombay High Court lifting the ban imposed by food safety regulators. It was banned for allegedly containing lead beyond the permissible limit.

When asked about Maggi ban, Castelmur said: "That was a kind of disturbing message for Swiss enterprises, who are long invested in India and who plan to invest in India." They could look at other countries for investments, he said.

"I think the ban was not justified clearly. It could not be substantiated very clearly. That is something that is disturbing potential investors or investors who want to do something," Castelmur told PTI.

It was a disturbing message in the sense that the regulatory framework is not clear enough and is not always applied in a convincing manner, he said.

"Swiss enterprises, reliable enterprises, producing all over the world and who want to invest in India are raising questions about the regulatory framework and the consistency and implementation and control by one of these authorities," he noted.

He added however that the Indian market cannot be ignored considering its size and talent pool but issues such as the ban could make things difficult.

"...Image is something important you know. You might want to shift production from country A to country B. You have many choices also you have huge competition between different countries. So I mean it might result that prospective investors who wanted to invest in India may shift to other countries," he said.

On whether the government needs to go the extra step to address the issue, Castelmur said the matter is about implementation and consistency.

"I think it is implementation and consistency. There are many laws and the framework could be good but implementation of the framework should be worked on. We hope that the authorities understand that there has to be some work done," he said.

While lifting the ban, the Bombay High Court in August had ordered that Nestle India can start manufacturing Maggi only after the noodles pass the tests by three government- accredited laboratories.

After clearing the tests, the noodles was re-introduced in the Indian market from November 9 onwards.

In June, Food Safety and Standards Authority of India (FSSAI) had banned Maggi saying that was "unsafe and hazardous" for consumption due to presence of lead beyond permissible limits. The company withdrew the noodles brand from the market.

While Nestle India had challenged the orders by FSSAI and Maharashtra FDA in Bombay High Court, the government had also filed a class action suit against it seeking about Rs 640 crore in damages for alleged unfair trade practices, false labelling and misleading advertisements.

Meanwhile, FSSAI has moved the Supreme Court against the Bombay High Court order in the Maggi noodles case seeking expunging of certain adverse remarks made against it.

The regulator has approached the apex court saying the High Court's August 13 order as "erroneous" and questioned the sanctity of the samples provided for re-test to government- approved labs.