Food sector updates- Week 5

Key developments:

  • The hearing on Maggi ban will continued on Monday in the Bombay High Court
  • Nestle India’s new MD has stated in media that his focus will be to engage with the regulators to resolve the matter at the earliest and also to rebuild the brand reputation among stakeholders
  • In the case of labelling of imported goods, India has ruled out any change in the norms as requested by the US
  • Ashish Bahuguna, Former Secretary, Ministry of Agriculture, has been appointed as the new chairman of FSSAI
  • In the Bombay High Court hearing yesterday, the FSSAI counsel made a point that Nestle violated Packaging and Labeling Regulations of 2011 by stating ‘no added MSG’ on the packets
  • In today’s proceedings, the Maharashtra State FDA will put forth their arguments today in the court
  • In Tuesday’s Bombay High Court case hearing, the Maharashtra FDA stated that Nestle India violated laws as the lead level in Maggi was above the permissible limit
  • Arguments will continue today where State FDA will present on ban of all nine variants of Maggi noodles
  • The Bombay High Court has allowed imports of Jacob’s Creek as on Tuesday, FSSAI had earlier put a ban on the imports of the wine due to presence of tartaric acid in it
  • As per market analysts, Nestle India is expected to report a subdued performance in June quarter due to Maggi noodles ban
  • Cabinet has approved replacement of a 29-year old law with a new consumer protection bill that is expected to enhance the quality and safety of products and services
  • In the latest legal proceedings regarding Nestlé India in the Bombay High Court, the counsel for the Maharashtra FDA has said that Nestle India's petition should be dismissed, as all facts were not included in the petition, filed at the Bombay High Court
  • The fiscal effect of the Maggi ban on Nestlé India has become evident, as the company has posted its first quarterly loss in 30 years. Analysts are unsure if the company plans to re-introduce its Maggi products into the market

News updates:

FSSAI Maggi call may drive away funds: Dilip Shanghvi, MD, Sun Pharma, ET Bureau, Economic Times – 31 July 2015

Dilip Shanghvi, founder and managing director of India's largest drug maker Sun PharmaBSE 0.13 %, on Thursday criticised the national food regulator's decision to ban Nestle's Maggi instant noodles, saying such arbitrary' decisions could drive away investments from the country.

FSSAI had on June 5 banned Maggi noodles, claiming that the popular instant snack contained lead beyond permissible limit.

This led to the world's largest food company reporting its first loss in three decades in the quarter ended June.

Non-Defining of Junk Food Under Food Safety Act, Business Standard – 31 July 2015

At present, there is no proposal under consideration of the Ministry of Health and Family Welfare to define junk food under the FSS Act.
However, guidelines for making available Wholesome, Nutritious, Safe and Hygienic Food to School children in the country have been framed by the Central Advisory Committee, FSSAI.

The National Institute of Nutrition (NIN), ICMR has not conducted a study on junk food. A study had, however, been conducted by NIN to
assess ill-effects of consumption of Carbonated Water beverages (CWBs) on the health of adolescents and young Adults, which showed higher increments of body fat in young consumers.

The MoS, Ministry of Health and Family Welfare, Shri Shripad Yesso Naik stated this in a written reply in the Rajya Sabha here today.

Tata Starbucks, Kelloggs, McCain fail to get FSSAI approval, PTI, Money control – 31 July, 2015

The Food Safety and Standards Authority of India (FSSAI) has rejected product approval applications of Tata Starbucks, Kellogg's and McCain due to lack of sufficient supporting documents for safety assessment, the Rajya Sabha was informed on Thursday.

While 34 products of Tata Starbucks have been rejected which included honey vanilla flavoured syrup, sea salt and red bean sauce, two products of Kelloggs including Kellogg's special K Red Berries and Kellogg's special K Oats and Honey have been rejected.

The Minister said that the primary responsibility of FSSAI is to lay down science based food standards, make regulations, regulate imports and undertake coordination with states and UTs on food safety.

Cabinet approves new Consumer Protection Bill that seeks to replace 29-year-old law, PTI, First Post – 30 July 2015

The Cabinet on Wednesday approved a new Consumer Protection Bill 2015 that seeks to replace a 29-year-old law

It provides a comprehensive framework for protection of consumer interests, and will replace the Consumer Protection Act, 1986

The Bill proposes to set up a regulatory authority that will have powers to recall products and initiate class action suits against defaulting companies, including on-line retailer

Nestlé case should be dismissed: Maharashtra FDA, Sapna Agarwal, Mint – 30 July 2015

Maharashtra Food and Drug Administration (FDA) has asked the Court to dismiss Nestlé India’s
June 10 petition, as the company had suppressed facts in its petition

Authorities had provided Nestlé India the test reports on 5 June along with a letter that told the company that it could ask for the test to be done again at an accredited laboratory

The company failed to mention these facts in its petition, according to the FDA counsel

FSSAI to set rules for watching health supplements, TNN, The Times of India – 30 July 2015

The FSSAI is soon going to regulate health supplements, as it has been observed that nearly 60-70 per cent of such products in the market are spurious, according to coverage from Indore

Currently, there are no regulatory norms for approval or monitoring of dietary supplements, neutraceuticals, herbals and functional food, but the FSSAI has proposed draft regulations that will come into effect in a few months

Neutraceuticals are categorized into functional food/beverages and dietary supplements

Manish Swami, a food safety officer in Indore, has said that with proper regulation guidelines, unregistered and unapproved products can be blocked and discarded

FORTUNE COOKIE: FSSAI gets tough with restaurants , Sourish Bhattacharyya, Mail Online India – 30 July 2015

Hotels and restaurants will soon have to set up departments devoted to FSSAI matters, and also dispose all ingredients considered unpalatable by the agency

What is at stake here is the right of every human being to choose what he or she eats without being told what to do by state-appointed authorities

Amit Lohani, Forum of Indian Food Importers, cited several examples of the agency’s arbitrary standards

Maggi row: Nestle violated laws, alleges Maharashtra FDA, PTI, DNA, The Hindu, Mint–29 July 2015

The Food and Drugs Administration of Maharashtra on Tuesday told the Bombay High Court that Nestle India violated laws as the lead level in Maggi was above the permissible limit

The counsel for the FDA also said that if there was a problem with the FDA report of lab tests showing lead in Maggi, Nestle India could have directly told the FDA, which could have sent samples for testing labs to accredited labs, instead of challenging FDA’s authority

The arguments would continue tomorrow by the counsel for the FDA and would take up the question with regard to why all nine variants of Maggi were banned when the FDA had only tested two variants of Maggi

Maggi Ban: Did info on the web influence your decision, HC asks FSSAI,Express News Service, The Indian Express –29 July 2015

On Tuesday, the Bombay High Court asked the FSSAI if it was influenced by information on the internet while ordering a ban on Maggi noodles

This observation was made in the wake of FSSAI citing examples of criticism of Maggi noodles, which were downloaded from internet

Cabinet to clear stricter consumer protection bill, Dipak K Dash, The Times of India – 29 July 2015

Cabinet is likely to clear the Consumer Protection Bill on Wednesday with provisions to make manufacturers and service providers liable for their products and services

It will also set up an authority with power to look into complaints, investigate and even order recall of unsafe products and order compensation to buyers

Nestle Q2 profit, revenue may fall on Maggi noodles ban, CNBC-TV18, Moneycontrol – 29 July 2015

Nestle India is expected to report a subdued performance in June quarter due to Maggi noodles ban

Last two months have been extremely difficult for Nestle owing to Maggi noodles controversy

Analysts see hit of Rs 120 crore towards disposal of Maggi noodles inventory as one-time loss

Ashish Bahuguna appointed as new FSSAI chairman, Shambhavi Anand, The Economic Times – 28 July 2015

The former Agriculture Secretary, Ashish Bahuguna, has been appointed as the chairman of the FSSAI, a position that has a tenure of three years

Bhanu Pratap Sharma, Secretary of Health and Family Welfare, was temporarily holding the position

2,700 reports say lead content within limit, Nestle tells HC, HT Correspondent, The Hindustan Times -28 July 2015

In the Bombay High Court hearing, Nestle India’s counsel stated that it has shared the entire process of recalling Maggi with the FSSAI and added that the company has 2,700 reports to state that lead content is under the permissible level

The Bombay High Court observed that as long as the product is within the permissible lead limit, the FSSAI cannot say that there has been any violation

The Court told the FSSAI’s counsel that if the company is still selling and manufacturing the product despite the ban, the FSSAI is free to take coercive action against Nestle India by giving the company a 72-hour notice

The counsel for the FSSAI has concluded his arguments and the counsel for the state and Food Drug Administration will state his
arguments today

Tough road ahead for Nestle India's MD-designate, Arnab Dutta, Business Standard – 28 July 2015

In an analysis piece, the journalist makes a point that the new Nestle India’s MD has a bigger task of propping up growth rates in the coming quarters and is expected to focus on Nestle India’s pipeline of products

The journalist has quoted a Credit Suisse report on Nestle business, which said that a large number of Nestlé’s global products had no relevance in India

The report had noted that the India business needs strong innovation in the dairy, instant noodles and chocolate categories, which
has been lacking from the parent company

New Nestlé India Head Looks to Rebuild Brand’s Reputation, The Wall Street Journal – 27 July 2015

The newly appointed Managing Director has said that he will focus on using advertising and social media, as well as the courts, to try to repair the damage done to its reputation by a recent food scare in India

He also plans to reach out to company stakeholders, including workers that held positions as suppliers and distributors who were left unemployed on the heels of the Maggi controversy

Analysts feel that an Indian-origin head of the company will be able to communicate more effectively with the government regulators

Maggi is safe, confident of resolving crisis & bringing it back on shelves: Suresh Narayanan & Ling Martello, Nestle by Ratna Bhushan & Chaitali Chakravarty, The Economic Times – 27 July 2015

As per media reports, Wan Ling Martello, Executive Vice President at Nestle SA is in Delhi to oversee the transition in India of the newly appointed Managing Director of Nestle India

In an interview to The Economic Times, Martello said that as the recall process comes to a close, Nestle India is looking at plans that involve rebuilding, including plans of new product ranges

Both Martello and the new MD has assured that there will be 100 per cent engagement with the FSSAI with talks with government in order to bring Maggi back

Food safety: Is your food killing you?, Elita Enoch,The Hans India – 27 July 2015

In an opinion article, Elita Enoch, covers the challenges to food safety in India and highlights the common adulterants in food

She also talks about simple ways to detect adulterants in food and asserts some tips to ensure food safety

Food packaging norms to stay, India tells US, Asit Ranjan Mishra, Mint – 27 July 2015

India has ruled out any change in its labelling or packaging for imports of American food items into India

US had requested for printing of the maximum retail price (MRP) and category of food item on the packet rather than putting on a sticker at the port

An Indian official speaking on the condition of anonymity has said that the exporting country has to abide by the laws of the importing country

The matter was discussed between Deputy US Trade Representative Robert Holleyman and India’s Commerce Secretary Rita Teaotia
when they met on Tuesday to discuss the agenda for the next round of ministerial-level meetings of the Trade Policy Forum (TPF) in the US


Next Steps

Site Selector