India | Gov’t seeks USD99m damages from Nestle after banning Maggi noodles

Maggi noodles were hugely popular across India and the three-decade old brand had an 80 pct share of the country’s instant noodle market. Dhiraj Singh / Bloomberg

India is seeking 6.4 billion rupees (USD99 million) in punitive damages from the local unit of Nestle SA, saying the maker of Maggi instant noodles engaged in “unfair trade practices.”
The Department of Consumer Affairs has filed a class-action suit on behalf of a “large number of consumers” for the sale of “defective goods” and a product without the regulator’s approval, the government said in a statement. Nestle India Ltd., in a stock exchange filing earlier yesterday, said it could comment only after receiving a notice.
The lawsuit deals another blow to Switzerland-based Nestle, which is battling an order to recall its popular Maggi noodles from Indian stores after the local food regulator said lead content in the snack exceeded permissible limits. Nestle India on July 29 reported its first quarterly loss in at least 15 years after halting sales of its best-selling product.
Nestle dominates the noodle market in the world’s second-most populous country, with a 63 percent share in 2014, six times as much as its nearest rival ITC Ltd., according to Euromonitor data.
Maggi noodles have been sold in India for the past three decades. Scores of Indians, who started off snacking on it as kids and then in college, now feed it to their own children.
The government, in its statement, said it was seeking the damages on behalf of Maggi consumers because of “gross negligence, apathy and callousness on the part” of the company.
Himanshu Manglik, Nestle India’s spokesman, referred to yesterday’s exchange filing, saying the company had nothing more to add. Nestle said it hadn’t received any official notice about the complaint filed with the National Consumer Disputes Redressal Commission.
The Food Safety and Standards Authority of India ordered the recall of Maggi packs from store shelves early June after its tests showed excess lead, findings that Nestle is challenging in the Bombay High Court.
The U.S. Food and Drug Administration said yesterday its own tests didn’t find unsafe levels of lead in Maggi instant noodles made by Nestle and sold in the U.S. Other regulators including from Singapore, Canada and the U.K. have also tested and found India-made Maggi noodles to be safe for consumption. Prabhudatta Mishra, Bloomberg