12th August

Indian government sues Nestle for $100m over Maggi noodles

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The  Indian Government  announced today that it is suing Nestle for $100m (£64m) over “unfair trade practices.”  following on from  its June recall of Maggi noodles,  descibed as ‘unsafe and hazardous for human consumption’ because of their high lead content.

This PR and economic disaster for Nestlé has undoubtedly been made worse by the company’s strategy for handling the whole  issue –  a strategy that has highlighted  its disregard for safety standards and human rights.   In June, when the story broke, Nestlé disputed the India’s High Court ruling claiming that its own tests ‘indicate Maggi noodles are safe for consumption’  but it has since nevertheless destroyed 400 million tons of the product.  Nestlé India spends Rs 300-450 crore (about £56m) annually on ‘advertising and sales promotion’  but only Rs 12-20 crore (about £2m) on ‘laboratory or quality testing.’ (TOI 7.6.15)

The issue has been a wake-up call for Mega Bollywood stars such as Amitabh Bachchan,  who have been promoting Nestlé’s Maggi Noodles for years.  These stars – along with millions of women  who have used Nestlé formulas,  have trusted Nestlé’s Health and Wellness claims, believing that Nestlé products are the healthy option and meet all food safety standards. With such endorsements Nestlé has captured 70-80% of the instant noodles market – and other highly processed salty, sugary, fatty snacks that are fast replacing traditional bio-diverse  staples and fuelling the rise in obesty related non-communicable diseases. A packet of Maggi noodles typically contains 60-70% of the maximum daily intake of salt.

How independent are food safety checks?   Baby Milk Action checked the  UK Food Standards Agency (FSA) website in June and found that it directed enquirers to Nestlé where the company attempted to allay the public’s  safety fears. Following Baby Milk Action’s complaint the FSA took the link down and soon after announced its test results that the lead levels of Maggi Noodles imported to the UK were ‘well within EU permissable  levels.’   According to press reports,  the Food Safety and Standards Authority of India has rejecting findings of the Food and Drugs Laboratory of Goa as well as CFTRI, Mysore over test discrepancies.  It also cast doubts over clean chits to Maggi noodles by UK and Singapore labs saying the Swiss food giant has not shared details of foreign test reports.

Yasmine Motarjemi, once WHO Food Safety Officer, and later Nestlé’s Corporate Food Safety Manager and Assistant Vice-President (2000 to 2010) was forced out of her job after repeatedly raising concerns about Nestlé’s lack of concern for food safety. Here are extracts from her response to Nestlé’s materiality matrix (see: What matters to Nestle? A view from inside the corporation on food safety).

‘First, Nestlé’s concern in regard to food safety is primarily not to cause mass/collective poisoning which would inevitably come to public attention; however, as long as the problem is not detected, then the product is safe. The company’s limit or criteria of safety is whether the company will be implicated in a safety scandal or not.

Second, their concern for safety is whether this will lead to a loss of business, not consumer health, one can see this from the behaviour of the company. In other words, if one or few consumers get ill and their problems can be fixed with compensation, they would not care much. This is seen as the cost of the business. Otherwise, I do not see an explanation for leaving on the market for over 2 years a product (baby biscuits) which caused choking of infants, while the parents were complaining; the manager responsible was even promoted. 

Also, according to a document submitted to the Court- in a case which opposes me to Nestle (Switzerland CC11.012142) , in 2005, the Company decided for a policy to link the bonus of its managers to incidents and product recalls. In my opinion, such a policy is contrary to food safety management principles. There are times that incidents do occur because of a human error or other factors. Linking bonuses to recall and incidents will discourage managers to report and to take early corrective actions, particularly in a company where the organizational culture is based on fearmongering.’