Nestle noodle crisis shows long road for India's food safety

VK Pandey’s team in Uttar Pradesh, India’s largest state, randomly picked about a dozen packs of Nestle’s Maggi instant noodles for a series of tests. The results showed that lead levels breached official limits, triggering a recall across a swathe of India and import bans in Nepal and Singapore.

“We would’ve sent more samples of Maggi, but we have a manpower shortage,” Pandey, an officer with Uttar Pradesh’s Food Safety and Drug Administration in Barabanki district, said by phone. “There’s been one vacancy open for three years.”

Nestle, whose local unit has seen its shares decline about 15 percent this month, said it will remove all instant noodles from Indian shelves to boost trust. Global Chief Executive Officer Paul Bulcke told reporters that the company tested more than 1,000 batches of noodles and found the India-produced Maggi to be “safe and well within the regulatory limits.”

“With the consumer in mind, we will do everything it takes, and are fully engaged with the authorities to clarify the situation to have Maggi noodles back on the shelves at the earliest,” Bulcke told reporters in New Delhi on June 5.

The crisis marks the highest profile case for India’s seven-year-old national food regulator and the patchwork of local agencies responsible for ensuring food is safe across the world’s second most populous country. While India has made progress on food safety, it has a long way to go.

“The government should have a pan-India monitoring system across food categories, but it doesn’t,” said Amit Khurana, program manager for the food safety team at the Centre for Science and Environment in New Delhi. “We hear it every time in the field: The state doesn’t have appropriate resources, there are a lot of vacancies, there’s no manpower, the infrastructure and labs need to be upgraded. The system is still evolving.”

Establishing a credible regulator is key for India to attract investment into food processing as Prime Minister Narendra Modi seeks to spur a manufacturing boom. The food services market alone is growing at nearly 12 percent each year and will be worth $175 billion by 2018, CLSA Asia-Pacific Markets said in a 2013 report.

The Food Safety and Standards Authority of India, known as the FSSAI, ordered a recall on June 5, calling samples of Maggi tested by various states “unsafe and hazardous for human consumption.” More than half of India’s 29 states have banned Maggi, according to reports from the Times of India newspaper over the past few days.

Nestle India’s shares fell again today on reports, including one in the Times of India, that Modi’s government will seek damages from Nestle in a case before its national consumer forum. The stock fell 5.1 percent as of 9:48 a.m. in Mumbai.

Multiple calls in the past few days to the office of Yudhvir Singh Malik, the FSSAI’s chief executive officer, weren’t answered. Neither were calls and an email to Rakesh Chandra Sharma, the food authority’s head of enforcement.

The FSSAI was established in 2008 after lawmakers streamlined a mishmash of laws dealing with adulteration, meat, fruit, oil and milk. Apart from framing rules and certifying laboratories, it advises on food safety and nutrition.

Enforcement of the rules is left to local authorities in states. There’s no real-time monitoring system such as that in the U.S., where the Food & Drug Administration helps to quickly identify, analyze and take action on any violation relating to food or medicines.

India is the seventh-largest provider of food to the U.S., according to the FDA. In March, the U.S. regulator signed an agreement with India to cooperate more on food safety.

“We left our meeting with FSSAI assured that we are on the same page with our Indian colleagues about our food safety goals, as well as the amount of work -- and collaboration -- needed to achieve them,” FDA officials wrote in a March blog post.

The Maggi incident started when Pandey’s team sent packs of the Nestle’s Maggi noodles for a routine lab test 14 months ago. The test came back positive for monosodium glutamate, or MSG, a chemical used to enhance savory flavors. Subsequent tests 750 miles away in Kolkata confirmed the MSG and reported excessive amounts of lead, about seven times the prescribed maximum.

Pandey said his department filed a court case with information about the lead and MSG content to force the company to take action. Nestle disputed the findings in August, citing previous cases in other states as precedent, he said.

After continued tests, Pandey said state officials asked Nestle in April to pull Maggi from stores. That sparked widespread media coverage, criminal complaints against Maggi and criticism of its celebrity brand ambassadors.

“We are making all possible efforts to clarify matters,” Nestle India spokesman Himanshu Manglik said in a text message after receiving emailed questions regarding the timeline of the tests and India’s ability to ensure food safety.

Past food safety incidents in India involving Mondelez International Inc.’s Cadbury’s chocolates, Pepsico Inc. and Coca Cola Co. show that Nestle can recover. Those companies bounced back in a few years after initially seeing a drop in sales and profits, according to BNP Paribas.