Shares of Nestle India Ltd. fell as much as 3% on Friday, June 12, after the Food Safety and Standards Authority of India (FSSAI) issued a notice to the company over alleged detection of Insect / Larvae in the Maggi packet.

According to the notice, the FSSAI is seeking a detailed Action Taken Report (ATR), including:

• Source / vendor details and internal quality check logs of the batch in question
• Immediate corrective measures taken to remove such products from the supply chain
• and steps taken to ensure such incidents do not recur

What Nestle Said About Maggi Noodles?

In its recently released annual report, Nestle India said that Maggi noodles, part of the cooking solutions business, delivered strong volume growth, by engaging in urban consumers and expanding their rural reach, leading to both market share gains and increase in penetration.

The Nestle Maggi Controversy In 2015

This is not the first time that the FSSAI has issued a notice to Nestle over Maggi noodles.
Back in 2015, the regulator had banned Maggi noodles nationwide after tests had detected unsafe levels of lead and the presence of added monosodium glutamate (MSG).

Following the results, the FSSAI had ordered Nestle to pull down all Maggi variants from the shelves, resulting in over 38,000 tonnes of noodles being called off, resulting in a stock damage worth over ₹320 crore.

Nestle challenged the ban which was then overturned in November 2015 by the Bombay High Court. The court cited procedural lapses by the authorities and ruled that the tests conducted by court-approved laboratories deemed the products safe.

What Did Nestle India Say In Its Statement?

In response to the news developments, Nestle India’s spokesperson released the following statement:

We categorically reject the allegations circulating on media basis an unverified account regarding the presence of infestation, allegedly on MAGGI noodles. We are yet to receive the complaint sample from the Complainant as the account is unreachable. A detailed representation, supported by all relevant facts, quality records from batch and market samples, test reports, has already been submitted to the competent authorities.

Nestlé India maintains stringent quality and food safety standards across its manufacturing operations. We remain fully transparent with the authorities and are confident that the facts and evidence will conclusively establish the truth of the matter.

We have performed our quality analysis on batch and market samples, for a comprehensive investigation to FSSAI Accredited lab and the report confirms with the quality standards including confirmation of absence of infestation of any nature.

Shares of Nestle India are ended 3.2% lower after the FSSAI notice on Friday at ₹1,376.5. The stock is still up 7% so far this year.