An Indian court granted relief to Nestle SA in a case that has pitted the nation’s food regulator against the Swiss giant over the quality of its iconic Maggi noodles.
The two-judge panel of the Bombay High Court found the June 5 order by the Food Safety and Standards Authority of India to be arbitrary, government lawyer A. Sethna said.
Sales of the snack can resume if new tests done at a certified laboratory were found to be acceptable and Nestle submits those test reports within six weeks, the judges said.
“The incident could become a big embarrassment for the Indian government as it makes it appear as if the state’s own laboratories are not able to carry out basic food quality tests,” Trust Financial Consultancy Services Pvt analyst Naveen Trivedi said prior to the judgment.
The government is also seeking 6.4 billion rupees (US$62 million) from Nestle in punitive damages.
Regulators from Singapore, Canada, the US and the UK carried out their own tests and found India-made Maggi noodles to be safe for consumption.
Sales of the noodles had stopped two months ago after the food regulator ordered the nationwide recall as it said government tests found the noodles contained too much lead.
Nestle India, the country’s top seller of noodles, filed the case on June 11 challenging the recall, insisting its products had been tested without finding abnormal levels of lead.
The company’s iconic noodles could be a few steps away from returning to market shelves after yesterday’s ruling.
“They really need to spend on promotions and ads to get back to the brand equity before this,” ICICI Direct consumer analyst Sanjay Manyal said.
The controversy has hinged around the testing methodology. The government said the seasoning and noodles should be tested separately, whereas Nestle insisted that the product must be tested in its final, cooked form.
Maggi noodles have been sold in India for the past three decades and Nestle dominates the local market with a 63 percent share last year.
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