Just when the conditions were turning in favor of Nestle, a new hurdle seems to be mushrooming. In first of its actions; the Indian government has sought a “compensation” of 640 crores INR ($100 million) for its misleading advertisements and false labeling of the product. This penalty is sighted to be a monetary punishment to the Swiss food giant as it has being ‘fooling’ Indian consumer and has been hiding the information regarding the inclusion of MSG (Monosodium Glutamate).
The Class Action Suit:
The Indian food authorities have termed this act to be a “class action suit” and this is the first time that the consumer affair department of the government followed by a tip from the law ministry has taken the company to the National Consumer Dispute Residual Commission (NCDRC). Usually in the consumer goods act the NCDRC jumps into action when a consumer files in a compliant but in this case Maggi; it is the government that has springed into action and filed a compliant again the brand.
The consumer affair department has sued the company and demanded the compensation as the company had been faking the advertisements with the tagline-”TASTE BHI, HEALTH BHI”. On these regards, the company has been promoting its product to be healthy and there is even a special mention about the pack not having any MSG, wherein the test indicated an outcome otherwise.
Damages are claimed under several sections of the Consumer Protection Act 1986
However, the first scars for Nestle began in late May this year when its premium product Maggi was found to be unsafe for human consumption due to the inclusion of MSG and lead particulars. The FSSAI (Food Safety and Standards Authority of India) ordered the call back of stocks from all around the country. This straight away caused bombing losses to the company and a serious dent to its reputation.
Hence, just when Maggi was thinking to re-enter its massive revenue paying market, it is facing a brand new row and would require to act faster than it did in the previous case.