The story has been told often this week, so we won’t repeat it here. But for those who have not followed the saga, a timeline of events can be found here.
Key events in the Maggi affair
Indians must now face up to a number of issues and pose some serious questions of their regulator.
For a start, why did the Uttar Pradesh food safety authority, the UP FDA, which first claimed to have found adulterants in samples of Maggi noodles, feel compelled to pronounce so publicly its initial findings in such strong and emotive language?
“Maggi instant noodles contained dangerous amount of lead and MSG,” one senior UP official told Reuters at the time. ”Our experts conducted several tests and each time the results were shocking.”
In most cases, one would hope the regulators would work with a company in Nestlé’s position through the early stages of the case to ascertain the facts. Instead, it seemed that state officials were queueing up to go on the record.
Why then, when there was no consensus among Indian state regulators over the putative adulteration, did the national regulator, the FSSAI, side with the UP FDA and others who claimed Nestlé had transgressed, whereas some, including the Maharashtra FDA, had given Maggi a clean chit?
Surely, if there wasn’t widespread agreement among state food testing labs, the decision to force Nestlé to pull its noodles was therefore based on conjecture. This turned out to be a very expensive hunch if you consider the trillions of rupees it has likely cost the company in waste, lost business and damage to reputation.
From this, Indians should now ask what exactly defines the role of the apex food regulator. They should also question why the FSSAI would allow such a clearly disjointed system to continue to operate.
According to industry expert Sunil Alagh, in an interview with CNBC-TV18: “There is an acute need to streamline testing processes in [India]. If this was the US, the company would've sued the government for billions of dollars [for harming Nestlé's reputation].”
Moreover, one former FSSAI head even called the process “high handed and done in a hurry”.
Why was the provision of natural justice not followed? Under the Food Safety and Standards Act 2006, Section 18, the processes the regulator must follow are spelled out. Its provisions state that the regulator cannot ban a product on the strength of a simple test report. First, the company should be given an improvement notice; only then, if there is no resolution, can the regulator take coercive measures.
Staying with processes, why did Nestlé’s counsel allege that Maggi’s product application stated that the noodle cake and tastemaker—the two components of the snack—were to be tested separately for monosodium glutamate?
The Swiss multinational refuted this, arguing that if this were the case, the two could not be considered to be in the same category under the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011.
According to Nestlé, the noodle cake would come under the “Foods not specified” category, while the tastemaker would be under the “Dehydrated onions, dry herb spices and flavouring” category. Each of these groups has a different regulatory limit for lead content.
It argued that the lead content of both ingredients combined should be what was measured for real-world benefit. However, Indian food safety authorities took a different, less reasonable line, insisting the lead levels of each component should be within the individual set limits.
“[The regulators] didn’t even bother to mix it,” Aalagh said afterwards. “You eat that seasoning alone, you will have upset stomach in any case.”
And why were the FSSAI and the government so arrogant that they would not accept Nestlé’s own test results, which the company claimed had been carried out on 2,700 samples, including 1,100 samples at independent accredited labs in India and abroad, as an indication that they were on the wrong track? A company of Nestlé's size and scale could call on resources and equipment far beyond the means even of India's regulators.
Moreover, why did the authorities dismiss test results from Singapore, Australia, Britain and the United States, carried out independently by bodies like the US FDA with strong reputations for food safety?
“We have been in intensive discussions with the authorities to clarify and show our arguments and our tests,” Paul Bulcke, Nestlé’s global chief executive, said in frustration back in June.
Could this be arrogance on the government’s part? Perhaps the same sort of arrogance that would lead a government to go to the unprecedented lengths of suing a food business for “unfair trade practices and defective and hazardous products have caused injury to millions of consumers”, as its complaint was worded.
In January this year, samples of milk were collected by the Ghaziabad FDA from Mother Dairy and sent for testing. Preliminary results suggested detergent and frozen fat were present in them.
In this case, Mother Dairy challenged the official reports and was granted a review of the samples at a different food laboratory. Embarrassingly, the samples returned yesterday, on the day Bombay high court was delivering its decision, and were marked “unsafe for human consumption”.
Why was Mother Dairy’s milk not withdrawn just as Maggi noodles were in June? Could it be because Mother Dairy was a government-owned co-operative?
And where does all this fit in with prime minister Narendra Modi’s much vaunted “Make in India" initiative, a central policy that is being touted to increase the country's lagging productivity?
That’s a tricky one because on the one side, Modi no doubt wants to promote the credentials of Indian companies over those from overseas even if, like Nestlé India, such multinationals have been in the country for over 30 years. On the other, he desperately needs businesses to set up base in India through foreign direct investment to set food processing off on a path of lightning growth.
This last point is pure conjecture, but no doubt many people will have a view on it. The government did seem seem happy, though, to have taken the dramatic action of suing a food company for damages when it really should have stepped in to calm the situation down.
On this point, why must Nestlé still face the consumer affairs ministry in court over the US$99m class action lawsuit the government has instigated?
While the Bombay high court made its ruling on the safety of the noodles, the National Consumer Disputes Redressal Commission, a semi-judicial body, will now decide on Nestlé’s alleged mislabelling of Maggi noodles to say the product contained “No added MSG”.
While the case looks pretty solid for Nestlé to those who understand the difference between “added MSG” and “natural MSG”, it is certainly no formality.
International food companies in India, and those considering investing in the country, will be deeply concerned about this precedent.
Indeed, The Washington Post reported last month how one Indian insurer, Bajaj Allianz General Insurance, had been predicting a tenfold jump in product insurance sales, with more makers of food, beverages and cosmetics seeking cover for regulatory risks like recalls.
“This is the first time the manufacturers have been shaken up so much,” the insurer told the Post. “Earlier, they thought such a thing would never happen to them. Now, everyone is keener to buy this policy.”
As the affair has progressed, Hindustan Unilever, India’s biggest consumer-goods company, said in June that it would be withdrawing its Knorr range of Chinese instant noodles; days later, Starbucks’s Indian made a similar pronouncement, adding that it was working “diligently” with the FSSAI on pending applications for approval.
It is to be seen to what lengths the regulator will now go in a bid to re-establish its reputation after the maulings it has received this year.
Instead of Nestlé, perhaps it is time for India’s feckless food regulator to get its comeuppance.
Maybe that is what food processing minister Harsimrat Kaur Badal, who welcomed the Bombay high court verdict, was alluding to when she told a conference in New Delhi that the FSSAI had created an “environment of fear” in the industry, with its actions discouraging new product development.
"Without mentioning the big elephant in the room of the food processing industry, the FSSAI, I would say that a lot needs to be done to remove the recent road blocks,” Harsimrat said cryptically.
“It needs to streamline its regulations and provisions as its steps are stopping innovations in the processing sector.”
At the same time, she announced a task force to look into regulatory issues, among others, to “analyse existing impediments and bottlenecks”.
Those hopeful that the cabinet minister’s words might signal a reform of this failing public body shouldn’t begin celebrating just yet as the FSSAI comes under the authority of the health ministry, not Harsimrat’s food processing department.
A canny politician, it is still likely that she picked her words very carefully. Maybe it is now time for the regulator to start looking over its shoulder the way it has been forcing the companies it oversees to do over the last year.