Nestle India to destroy $50m worth Maggi noodles following ban

Nestle is destroying 27,420t of its Maggi noodles stock worth more than $50m in India after a recent ban on the products by the country’s food safety authority.

Nestle said in a statement: "The estimated sales value of the stock in the market, including those with our trade partners, is around $32.6m. In addition, there were Maggi Noodles and related materials in our factories and distribution centres when the withdrawal was announced, and the estimated value of these is around $17.11m."

The company is also expected to lose more than $200m in brand value after the noodle samples were deemed hazardous and unsafe for consumption by the Food Safety and Standards Authority of India (FSSAI), owing to the presence of excess amounts of lead.

According to Brand Finance analysts, Maggi’s brand value was around $2.4bn before the ban, which has now reduced to $2.2bn.

Brand Finance CEO David Haigh said: "Any health concerns raised by a credible source such as the FSSAI will most certainly damage customer loyalty and consideration of a food brand.

"As Maggi’s parent company, Nestlé will have to turn around swiftly to ensure that the Maggi brand can retain its dominance in the Indian market. If not, the Nestlé brand itself could be at risk as the Nestlé logo prominently features on the back of Maggi noodles packaging, making it synonymous with the Maggi brand."

Nestle has reportedly hired furnaces belonging to cement manufacturers for destroying the products.

The Hindustan Times quoted Nestle India supply chain executive vice-president Luca Fichera as saying: "The trust of our consumers is extremely important for us and despite the enormity, we are focused on completing this efficiently and as fast as feasible.

"There are 38 distribution centres in India, 1,400 distributors and 3.5 million retailers. We have control over only 1.5 million retailers and outlets. We can track the recall only there."

Nestle has also approached the Bombay High Court to contest the ban. Vouching for the safery of its products, the firm says that the state governments and FSSAI have not shared the details of the tests with it till now.

The court sent a notice to the food regulator on this and scheduled a hearing on June 30.