India sues Nestle for $100m over Maggi row

A day after the US Food and Drug Administration (FDA) declared Nestle’s Maggi noodles safe for consumption, India’s central Government has sued the multinational for close to $100m over "unfair trade practices".

The claim, made on behalf of Indian consumers, was filed through the National Consumer Disputes Redressal Commission (NCDRC), which has semi-judicial powers, reports BBC.

However, a Nestle spokesman declined to comment on the latest move. The company said it would only be able to "provide substantive response" after it received an official notice about the complaint filed to the NCDRC.

Nestle’s instant Maggi noodles got involved in a nationwide food scare in May after a test on the product in separate states revealed that the product contained almost seven times the permissible amount of lead.

Following the report, India’s food safety authority, the FSSAI, ordered the company to recall all nine varieties of Maggi noodles from the market, as well as to stop production, processing, import, distribution, and sales.

Though the company had already destroyed around Rs3600m ($56.4m) worth of Maggi noodles based on the analysis of many states, it challenged the FSSAI’s decision to ban the product in the Bombay High Court, whose verdict is awaited.

Besides the US FDA, Nestle’s Maggi samples have been declared safe for consumption by independent test results in Britain and Singapore.

Two separate Indian laboratories in the western state of Goa and the southern city of Mysore also reported the products safe, but the FSSAI rejected their findings.

Nestle’s shares have taken a major fall with the Indian Government’s latest move, dropping by as much as 4.7%. The multinational recently posted its first loss in nearly 17 years.

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Image: Nestle has destroyed around INR3600m ($56.4m) worth of Maggi noodles based on the analysis of many states. Photo: courtesy of artemisphoto/ freedigitalphotos.net.