Nestle's India unit says new tests find Maggi noodles safe

MUMBAI (Reuters) - Nestle SA, the world's largest packaged food company, hopes to have its Maggi noodles back on Indian shelves soon, after court-mandated test results found them to be safe, with levels of lead present well below permissible limits.

The fresh test results are set to bolster the Swiss food giant's prospects in India, a fast-growing consumer goods market where Nestle has been grappling with its worst public relations crisis following a nationwide ban on its Maggi instant noodles.

The ban was imposed after local regulators reported in May that some packets of the noodles contained unsafe levels of lead. The firm had to order a recall of the product a month later, which cost it about 66 million Swiss francs ($67 million).

In August, an Indian court ruled in favour of Nestle in its battle to overturn the ban, but demanded that the popular snack be tested again for safety before it can go on sale again.

Nestle's India unit said in a statement on Friday it had received test results from all three of the laboratories, mandated by the Bombay High Court, and all 90 samples, covering six varieties, were safe to eat.

Nestle India will start making and selling the noodles after the newly manufactured products are also cleared by these three laboratories, it said.

Nestle SA's Chief Financial Officer Francois-Xavier Roger said in Vevey, Switzerland on Friday the company was doing all it could to put the noodles back on sale in India.

The company said it was hopeful it could return Maggi noodles to shelves in India sooner rather than later.

The parent company cited the Indian noodle recall as one of the factors as it lowered its full-year outlook on Friday.

Nestle India Ltd said in July it had slipped to a second-quarter loss as sales plunged after the Maggi noodles were removed from sale.

The challenge for Nestle now will be to rebuild the Maggi brand in India.

"A ban is not only financial damage but also a damage to the brand," Arvind Singhal, chairman of retail consultant Technopak, said. "Nestle's challenges are three-fold - to start production, distribution and communication with consumers."

(Reporting by Sumeet Chatterjee and Nivedita Bhattacharjee; Editing by Miral Fahmy and Adrian Croft)