Maggi clears all tests -
NEW DELHI | MUMBAI: Maggi, the popular instant noodle brand, is set to return to store shelves as Nestle BSE 6.06 % said it cleared tests mandated by the Bombay High Court and that the company will restart production of the snack within two-three weeks.
Nestle India announced a voluntary recall of the noodles on June 5, the same day national food regulator Food Safety and Standards Authority of India (FSSAI) banned its sale alleging excessive levels of lead in it and mis-labelling on the pack. The recall, the country"s biggest and which grabbed international headlines, almost wiped out the entire instant noodles category and dented the sales of all packaged snacks, as wary consumers avoided them.
On Friday, Nestle said it received results from all three laboratories mandated by the high court to test the samples.
All the 90 samples, covering six variants, tested by the laboratories had lead much below the permissible limits, it said. These are the same Maggi lots that failed to clear tests at FSSAI labs, it said. FSSAI officials could not be contacted for comment.
"This speaks volumes about the regulatory apparatus of the country, and even its antibusiness stance in this case," social commentator Santosh Desai said. "It"s about a global foods giant with well-established credentials being targeted."
On Friday, Nestle India"s stock rose 6% to a two-month high at Rs 6,580.10, outpacing the benchmark Bombay Stock Exchange index that gained 0.8%
The return of Maggi comes at a time when the Indian company"s Swiss parent, Nestle SA, announced a reduction in its full-year sales forecast, citing recall of Maggi, which rakes in Rs 2,000 crore annually for the Indian unit. The world"s largest food company cut its forecast for organic sales growth to 4.5% this year from the previous estimate of 5%.
In a news release, Nestle India said in compliance with court orders, it will start selling new lots of the product only after they are al also tested and cleared by the designated three laboratories.
The company said it conducted more than 3,500 tests representing over 200 million packs in both national as well as international accredited laboratories and all reports were clear. In addition to these, various countries including the US, UK, Singapore and Australia have found Maggi noodles manufactured in India safe for consumption, it said.
The FSSAI had banned sale of Maggi noodles citing lead levels more than the permissible quantity of 2.5 parts per million, mislabelling on the packs and selling a variant of Maggi noodles without product approval.
The recall had cost Nestle Rs 320 crore, and another Rs 1,270 crore in brand loss, according to global valuation consultancy Brand Finance.
"We had already factored our price on the expectation that Maggi will be back in the market by December. Hence, there is no re-rating on the stock but the development is surely positive. However, concerns on Nestle"s other segments still remains," said Nitin Mathur, analyst at French financial services firm Societe Generale.
Read more at:
http://economictimes.indiatimes.com/articleshow/49423524.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.
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