Safal Verma

S143F0029
4th Trimester
Nestle Maggi - the controversy surrounding it, perspectives of consumers,
government and the marketers.
Before getting into the perspective of what others think about Maggi, firstly let us
know what actually happened and what is the controversy all about.
An officer of the UP Food Safety and Drug Administration based in Barabanki
ordered tests on a dozen samples of Nestles Maggi instant noodles at the state
laboratory in Gorakhpur, and repeat tests at the Central Food Laboratory in Kolkata, a
referral lab. The Gorakhpur lab tested for monosodium glutamate (MSG) to check
Nestles claim that Maggi had none. Both tests found MSG; in addition, the Kolkata
lab found very high quantities of lead 17.2 parts per million according to UP
authorities. According to the rules, the lead levels should have been less that 2.5 parts
per million (ppm).
Based on these finding the UP FDA in the Barabanki court filed a case against Nestle
Maggi.
Nestle on the other hand says that We do not add MSG to our Maggi noodles sold in
India and this is stated on the concerned product. However, we use hydrolysed
groundnut protein, onion powder and wheat flour to make Maggi noodles sold in
India, which all contain glutamate. We believe that the authorities tests may have
detected glutamate, which occurs naturally in many foods.
It also said that the company had submitted samples from almost 600 product batches
to an external laboratory for an independent analysis, but did not identify the lab.
It also said it had conducted in-house tests on 1,000 samples at its accredited
laboratory. These samples represent around 125 million packets. All the results of
these internal and external tests show that lead levels are well within the limits
specified by food regulations and that Maggi noodles are safe to eat. We are sharing
these results with the authorities,
This has been the overall controversy where both the parties are taking stands but the
problem here what Nestle needs to understand is, the damage this controversy is doing

on the companys image.

In order to control the damages, Nestle needs to take quick action, which
unfortunately has not been seen till now.
And, as rightly said, It may take years to build a brand but it may take just two
minutes to tarnish a brand. This is what happened with Maggi, who enjoyed 80%
market share in the instant noodle category.
Now that we know that situation and the position of Maggi in the Indian market, we
need to look at the different perspectives from the consumers side, governments and
marketers side, respectively.
The government is sticking to its ruling of banning the product across India and is not
willing to uplift the ban until a concrete decision is achieved at. But, the court has
allowed Nestle to continue its exports, but the product wont be available in the local
market till the ban is removed. The government has set a good example to the other
companies as well who violate the food regulations and slowly bringing them under
scanner.
The consumers perspective is, I would say mixed, as one party (i.e. govt.) says that
the product contains high levels of lead and MSG whereas on the other side Nestle is
saying that the product does not contain any of these substances, which the company
is supporting by laboratory sample results which say that the product is good to go,
even the Canadian food authorities have given it a green signal, which clearly shows
that there is some problem in either of the parties. Also, the consumers emotional
attachment with the brand is not letting the customers think badly about the brand.
This is the scale of impact, which Maggi had on its customers whim I believe is not
measurable.
The marketers perspective is also mixed, as they have no clue about the next move,
but what they clearly know is the impact or the damage this case has brought to Nestle
India, which might take years to rebuild. The marketers also know how much loss
has been made till now, so is it viable to invest in the company anymore or not as the
marketers are only interested about their money and where have they invested in.
Overall I would say that marketers also have a mixed perspective about the situation.
What Nestle should have done or should do now?

Protect the brand name, which unfortunately Nestle didnt, which lead to

higher losses. Nestle allowed Maggi (its icon) to be the target of a controversy

that questioned its reputation.

Creating an Action Plan, which Nestle didnt do in the early days of the case
and allowed the government to attack on its image. It needs to have a action
plan and mainly call of action for the media, as media plays an important role
in either protecting your companys image or damaging it more. What Nestle
did was remained quite in the starting days of the case, which should not be
the case and pro-active approach should be taken by the company and

reaching out to maximum people or customers possible.

Dont deny, which Nestle clearly did ever since the first day, instead a
different approach should have been taken saying that the company will look
into the matter, should have gotten all the sample tests done, and then should
have denied that facts.

Looking at what Nestle did, and what it should have done, it can be clearly seen that
there is a communication crisis, which needs to be corrected as soon as possible. In
order to continue what Nestle enjoyed for years i.e. huge brand loyalty and brand
connect, certain corrective measures will have to be taken care of and come back into
the market as soon as this issue is resolved with a better quality product which meets
the standards and again start enjoying its position in the Indian market.