Maggi Noodles again turns troublesome for Nestle India

Nestle India is under pressure yet again after its well-known brand Maggi noodles failed to pass the lab test under the district administration of Shahjahanpur, Uttar Pradesh. The company is imposed with a fine of Rs 45 lakhs, Rs 17 lakhs has been imposed on its six distributors and Rs 11 lakhs on its two sellers.

As per information provided by district authorities, the samples collected for lab test were of November 2016. The main reason behind it failing the test was that ash content found in the samples were above permissible limits for human consumption.

Nestle India responded to this by saying that the company has not received such orders from the adjudicating officer and the samples are of the year 2015. It will file an appeal once it receives the formal order. The management believes and strongly urges that Maggi Noodles are 100 percent safe for consumption. Maggi Noodles were re-launched in the market in November 2015 after the ban imposed by the FSSAI was lifted by the Bombay High Court.

Nestle India’s stock had plunged by ~23 per cent between October 2015 and March 2016. Later the stock recovered and was in consolidated position till January 2017. Post February 2017, a continuous upward trend was seen in the stock price movement and it made 52-week high of Rs 8,000 on November 8, 2017. In the past seven months, the stock has surged by ~28 per cent.