Odd to take Maggi to court while US FDA clears it
Given that Nestle’s Maggi noodles have already been banned and almost all existing stocks destroyed, it is not clear what exactly the government hopes to achieve by taking the company to the National Consumer Disputes Redressal Commission (NCDRC) on behalf of Indian consumers to seek damages against its ‘unfair trade practices’ and ‘misleading consumers’. According to a report in the Business Standard, the file for this has been formally cleared. What makes the case even more odd is that Nestle is already in court, so it is not clear what more the NCDRC is expected to do. Nestle has challenged the Food Safety and Standards Authority of India (FSSAI) ruling in the Bombay High Court, and that includes the charges of incorrect labelling—presumably the NCDRC case will focus on this—apart from the question of whether FSSAI tests actually meet required standards.
Whatever the reason behind the move to go to NCDRC—it could possibly be to send a message to Nestle that the government is backing FSSAI all the way—Nestle should welcome it. Given how different Indian food safety authorities have different views on Maggi points to a huge problem in the testing standards—the food regulators’ tests in Goa, Maharashtra and Kerala found no problems with the noodles while Delhi, Uttarakhand and Gujarat found a problem in terms of the lead and monosodium glutamate (MSG) levels. This gets strengthened with the US FDA also clearing the noodles made in India—food regulators in the UK, Singapore, Canada, Australia and New Zealand have also given their approval to the product. So, whether in the Bombay High Court or elsewhere—if the NCDRC rules against Nestle, the firm will go to the Supreme Court—Nestle will argue both the FSSAI’s testing standards as well as the labelling norms used by it in the case of Maggi have a problem.
While the testing standards will be about whether the noodles and the tastemaker should be tested together after being cooked or separately, the labelling issue will be about whether or not FSSAI rules prohibit using the term ‘no added MSG’ in case a product has naturally occurring glutamate as in the case of the noodles. From the point of view of the government, the NCDRC case makes even less sense. Investors have their own list of stories of global firms who have run afoul of the authorities—Vodafone, Shell, Cairn, Microsoft … and now a host of FIIs—so the last thing needed is to add one more name to this list. Given the fallout of the Maggi incident—food processing minister Harsimrat Kaur Badal is on record saying FSSAI is creating an environment of fear—and its international ramifications, it is important the Cabinet examine the issue of filing a class action suit against Nestle and its Maggi noodles. This will also help clear whether it is an individual ministry that favours the action or whether that is the considered view of the government.