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Nestlé pulls its “completely safe” noodles from stores across India

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Heading back to the shelves of India's stores.Photograph by Chandan Khanna — AFP/Getty Images

Nestlé SA (NSRGY) pulled its Maggi instant noodles from stores across in India, withdrawing one of the country’s most popular snacks after weeks of damaging headlines triggered by regulators’ reports that some packs contained excess lead.

In what has become India’s most significant packaged foods scare for nearly a decade, Nestle reiterated on Friday that its noodles were “completely safe.” But after coming under fire for what domestic media said was a failure to react swiftly and decisively, the group said it would pull the product regardless, more than two weeks after food inspectors first reported their findings.

At least six states, several major retailers and even the Indian army have banned Maggi noodles. On Thursday, Tamil Nadu became the first state to ban a handful of brands of instant noodles, including Nestlé’s.

“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,” the Swiss-based firm said in a brief statement.

Sales of Maggi in India represent just 0.005% of Nestle’s global revenue of almost 92 billion Swiss francs ($98.6 billion). Maggi noodles account for roughly a fifth of Nestle’s sales in India, which also include dairy products, chocolate and baby food.

But the importance of containing damage to the brand has not been lost on Nestlé, whose group chief executive Paul Bulcke will speak later on Friday in New Delhi to seek to draw a line under the scare.

Maggi two-minute noodles, which sell at roughly a dozen rupees ($0.20) per single-serving packet, are a hugely popular snack in India. The food is frequently served to children and eaten at roadside shacks and “Maggi points” across the country.

Often using Bollywood superstars in advertising campaigns, Maggi has been a market leader for three decades, though it now competes with rival brands like Hindustan Unilever Ltd’s (UN) Knorr and GlaxoSmithKline PLC’s (GSK) Horlicks.

Analysts and industry advisers welcomed the recall but questioned the firm’s strategy of denying the problem for weeks, even as headlines proliferated.

“If you ask me everything that Nestlé has done is wrong,” said Arvind Singhal, chairman of retail consultancy Technopak.

“In this day and age of social media you cannot question the government and consumers…If your product is safe and you are confident, you recall it immediately without question, because it is safe, and will pass tests.”

Despite poor public hygiene, India has not experienced food scares on the scale that has hit neighbouring China in recent years. But analysts say the country’s increasingly affluent, health-conscious consumers and easy access to social media are likely to mean more incidents are brought to public attention, and international brands need to be better prepared.

Employees questioned by Reuters at several multinational food companies operating in India reported what one described as a “state of alert”.

“You have to understand multinationals are soft targets,” said a top executive at one, speaking on condition of anonymity. “If they checked street food, who knows how much lead and other things are to be found?”

The noodle scare is India’s biggest involving packaged foods since 2006, when a New Delhi environmental group raised questions over pesticide traces in Coca Cola Co (KO) and PepsiCo Inc (PEP) fizzy drinks.

Food inspectors in the northern state of Uttar Pradesh last month reported high lead content was found during routine tests on two dozen packets of instant noodles.

Nestlé India had said earlier this week it had conducted internal and external tests on samples of 125 million Maggi packets which showed the noodles were safe to eat.