NEW DELHI: Nestlé India's attempts to rebuild its battered image following the Maggi noodles food scare has hit a setback as the Indian government has lodged a claim for Rs 640 crore ($100m) in damages.
The food giant is accused of unfair trade practices, false labelling and misleading advertisements of the popular noodles brand, the Financial Express reported.
The Consumer Affairs Ministry also said it would seek additional damages when further facts and data emerged.
The sums being sought are intended to send a message to other food companies, as the petition made clear.
"The punitive/exemplary damages are significant in the present case and are intended to reform and deter the Opponent and other food companies from engaging in conduct similar to that of the Opponent company, so that the common public does not suffer and is not helpless to protect its health and wellbeing," it said.
Nestlé has recalled the offending product while continuing to maintain that it is completely safe.
The Financial Times reported that food safety authorities in the US, UK, Canada, Australia, New Zealand and Singapore had found the Indian-made Maggi noodles did not have unsafe levels of lead and had cleared them for sale.
It also quoted Sunil Jain, managing editor of the Financial Express and a leading economic commentator, who described the government's decision to seek damages as "frivolous" and "terrible publicity" for the country.
"This last thing you want to do is pick a fight where other regulators in the world have said 'this is OK'," Jain said. "It's one hand of the government not knowing what the other is doing."
Two weeks ago the new head of Nestlé India, Suresh Narayanan, said his immediate goal was to rebuild the company's brand "brick-by-brick, consumer-by-consumer and employee-by-employee", a task that is not getting any easier.
The food giant is accused of unfair trade practices, false labelling and misleading advertisements of the popular noodles brand, the Financial Express reported.
The Consumer Affairs Ministry also said it would seek additional damages when further facts and data emerged.
The sums being sought are intended to send a message to other food companies, as the petition made clear.
"The punitive/exemplary damages are significant in the present case and are intended to reform and deter the Opponent and other food companies from engaging in conduct similar to that of the Opponent company, so that the common public does not suffer and is not helpless to protect its health and wellbeing," it said.
Nestlé has recalled the offending product while continuing to maintain that it is completely safe.
The Financial Times reported that food safety authorities in the US, UK, Canada, Australia, New Zealand and Singapore had found the Indian-made Maggi noodles did not have unsafe levels of lead and had cleared them for sale.
It also quoted Sunil Jain, managing editor of the Financial Express and a leading economic commentator, who described the government's decision to seek damages as "frivolous" and "terrible publicity" for the country.
"This last thing you want to do is pick a fight where other regulators in the world have said 'this is OK'," Jain said. "It's one hand of the government not knowing what the other is doing."
Two weeks ago the new head of Nestlé India, Suresh Narayanan, said his immediate goal was to rebuild the company's brand "brick-by-brick, consumer-by-consumer and employee-by-employee", a task that is not getting any easier.
Data sourced from Financial Express, Economic Times, Financial Times; additional content by Warc staff
