#MaggiBan: Nestle discontinues Maggi from the market. Nestle employees keeping mum

The Friday morning Twitter had ‘MaggiBan’ trending in a different way. While till date it was the state governments taking decision to ban the instant noodles, it is the first time when Nestle, the makers of Maggi have officially decided to put their products off the shelves. Having created a lot of hullabaloo over usage of lead in the Maggi Masala above prescribed limit, Nestle’s decision to keep Maggi out of the market is being assumed as an emergency damage control measure.

"The trust of our consumers and the safety of our products is our first priority," the group said in a press statement.

"Unfortunately, recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer, to such an extent that we have decided to withdraw the product off the shelves, despite the product being safe."

Putting Maggi off the market isn’t enough for Nestle. The Swiss company has asked the local executives in India not to talk publicly about developments. Sources have confirmed The Economic Times, They have been told not to engage directly with stakeholders, trade partners, dealers and distributors without approval. "Any engagement needs to be approved and vetted by the company's legal team only," said one of the officials mentioned above.
Nestle India's contribution to the Swiss firm's global revenues is barely 1.8%. The Maggi brand contributes about a third of the Indian unit's annual sales of Rs 9,500 crore.
"India is an emotional country... the reaction to this issue can't be clinical or detached, which is how it is coming across so far," CEO of a top multinational consumer goods firm told the ET. The financial daily couldn’t reach Nestle for immediate comment.

"This was the fastest growing segment for Nestle over the past few years and was reporting positive volume growth compared to the decline reported by the company's other business segments," Abneesh Roy, associate director at Edelweiss Securities told the ET. "Hence, in the light of the recent news we downgrade the stock to 'reduce' from 'hold' and rate it sector 'sector underperformer'."

Reviving the brand will involve investing heavily in communications. "Legal costs/promotions will also inch up, which will take a toll on margins," Roy added.

(Image: India Times)