Moneycontrol
Last Updated : Jan 07, 2019 02:55 PM IST | Source: Moneycontrol.com

Maggi fights to retain market share after SC reopens food contamination case

In the latest twist, Nestle admitted to the presence of lead in the product - though 'within permissible limits' - before the Supreme Court.

Himadri Buch @himadribuch
 
 
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Nestle India's Maggi is scurrying to guard its market share after the Supreme Court last week lifted a stay on a class action suit filed by the government in 2015 alleging the noodles contain excessive lead and flavour enhancer MSG.

Maggi has recouped share to nearly 60 percent in the Rs 4,000 crore instant noodles market in India but is still far from the 77 percent share it enjoyed before the controversy broke out in June 2015 leading to its ban by Food Safety and Standards Authority of India (FSSAI).

The ban resulted in a hit of Rs 450 crore to the company, forcing it to destroy more than 30,000 tonnes of Maggi noodles.

In the latest twist, Nestle admitted to the presence of lead in the product - though 'within permissible limits' - before the Supreme Court.

The court hearing made it clear the safety of the noodles was being questioned again and the class action suit initiated by NCDRC (National Consumer Disputes Redressal Commission) for lead content has been reopened.

The 2015 impact

Maggi was banned for five months for allegedly containing lead beyond permissible limits, forcing Nestle India to withdraw the product from the market.

This ban not only brought down its share but also hit the brand in a big way.

According to Nielsen, the share of Maggi dropped to as low as 42 percent in January 2016.

During the same period ITC Foods' Sunfeast Yippee brand of instant noodles, a close second, Nissan's Top Ramen and Cup Noodles, Ching's Secret, Wai Wai and HUL's Knorr saw improvement in their market share at the cost of Maggi.

In March 2016, the market share of Sunfeast Yippee Noodles shot up to 30 percent. However, it currently stands at 22 percent after Maggi hit the stands again.

Similarly, Wai Wai's market share, which was merely 7 percent, had risen to 15 percent. It currently stands at 18 percent.

Back in the market in November 2015, Maggi has since gained sustainable share helped by the introduction of new variants and deepening reach.

Ads blitz

Immediately after the controversy resurfaced, Nestle released newspaper ads to calm the nerves of its customers.

The ad, called 'Your Maggi is Safe,' highlighted facts of Maggi. The company claimed it doesn't add lead in the making of the noodles, but the lead occurs naturally.
First Published on Jan 7, 2019 02:52 pm
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