Maggi sales hit after ‘monosodium glutamate (MSG)’ controversy

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Maggi, the brand from Swiss foods major Nestle which has a dominant position in the Indian market has recently been courting controversy after it was revealed that a sample tested for quality by a government agency about two weeks back contained monosodium glutamate (MSG) and lead beyond permissible levels. The impact on sales is estimated to be in the range of 15-20 per cent in large metros. Not only the Maggi brand which is synonymous with noodles in India witnessed a decine in its popularity and image even the general trade is now reticent in stocking the brand given the decline in sales.

Maggi which clocks Rs.1500 crore annually for Nestle is in the thick of the storm now and it is widely believed that controversy could impact sales of the entire category. Recently even Yippee brand of Noodles from ITC was also in news for similar reasons. The dent in image is surely going to affect the similar products sold by its competitors like Horlicks Foodles as well. It is reported that since the fear has hit parents since it involves children in some retail stores the sales of Maggi is down by 40 to 60 per cent.

In a media statement, a Nestle India spokesperson said on Monday: “We understand that consumers are concerned by reports that the authorities in Uttar Pradesh have found elevated levels of lead in a sample pack of Maggi noodles. We are fully cooperating with the authorities who are conducting further tests and we are awaiting their results.” Though Nestle has come out with this statement and submitted Maggie noodles samples from almost 600 product batches to an external laboratory for independent analysis it will take some time for Nestle to regain the trust of the people in the hot selling brand of Noodles, Maggi.  The company tested samples from almost 1,000 batches at its laboratory.

Though the company claims that Maggi Noodles have consistently shown levels within permissible limits, it remains to be seen how the parents respond to it since it involves the health of children.