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Maggi Faces Lack of clarity on Production Ban in Stataes

... Business-Standard:

Though popular instant noodles brand Maggi has passed the safety tests mandated by the Bombay High Court, it faces hurdles on the production front, owing to lack of clarity on whether state-wide bans across the five Nestle India facilities that manufacture Maggi are still in place or not.

The five plants are located at Punjab, Himachal Pradesh, Uttarakhand, Goa and Karnataka. While Punjab, Himachal Pradesh and Uttarakhand were among the first few states to ban Maggi, following the detection of contaminated samples in those regions, Goa and Karnataka followed. Goa banned the product in June as a "precautionary measure", while Karnataka first gave a thumbs-up to the product and then reversed its stand.

Maggi faces production roadblocks

Sources say the Nestle India management is talking to the authorities in Goa and Karnataka to allow production in these states. Goa is on top of the company's list, as a Central Food Technological Research Institute laboratory, approved by the Food Safety and Standards Authority of India (FSSAI), had found samples of Maggi sent by the Goa FDA to be in compliance with food safety norms.

Responding to queries on the issue, a Nestle India spokesperson said re-starting the manufacturing process was lengthy and complex. "We will evaluate where we can accelerate the process of re-starting production under the current circumstances," the spokesperson added.

Those in the know say resolving production issues will be critical for Nestle, as it looks to re-launch Maggi by the year-end. Earlier, Nestle India Managing Director Suresh Narayanan had said the company would press all levers to make the re-launch memorable.

For that, Nestle will have to commence production at the earliest.

Some say Nestle could have avoided the current logjam had it not terminated an agreement with Kolkata-based contract manufacturer SAJ Food Products last month. As West Bengal didn't ban Maggi, the issue of having to negotiate with state authorities wouldn't arise, they add.

The FSSAI-certified SAJ Food Products manufactured about four per cent of Maggi's annual volumes.

As Nestle didn't have its own plant to manufacture Maggi in the eastern region, SAJ was a key contract manufacturer.

While SAJ Chairman K D Paul said his company continued to manufacture other Nestle products, he declined to specify what led to the termination of the Maggi contract. "The decision (to terminate the Maggi contract) was taken by Nestle, as it thought it would be best to use its own production facilities," Paul said. "We not only remain manufacturers of other Nestle products, but also their leading distributors in the (eastern) region.