India Seeking $99 Million From Nestle Over Noodle Soup Scare

The Indian government is seeking $99 million in damages from Swiss food and beverage giant Nestle over a recent food scare involving the Maggi brand of instant noodles that are a household staple in India.

The class action, filed late Tuesday before India's National Consumer Disputes Redressal Commission, accuses Nestle of "gross negligence, apathy and callousness."

The government had ordered the popular snack cleared from the country's shelves in June, after India's food and safety regulators said they found unacceptable levels of lead in some samples, as well as the presence of monosodium glutamate, despite a label that said "No MSG."

In response, Nestle pulled nearly 400 million packets of its No. 1-selling brand from Indian stores.

A unit within India's Ministry of Consumer Affairs filed a complaint under the Consumer Protection Act, alleging that Nestle has engaged in "unfair trade practices" and sold "defective goods" to the public.

Dismissing the allegations, Nestle Chairman Peter Brabeck told the Swiss newspaper Handleszeitung that Indian authorities forced Nestle to burn 29,000 tons worth of "quality" food in the instant noodle soup dispute. He's quoted as saying, "Laboratories in the United States, Britain, Australia and Singapore did not find anything harmful in the noodles. Our products are safe for consumers." Brabeck added, "Nevertheless, the case in India is not harmless and should not be underestimated."

The food safety scare that has been a commercial disaster for Nestle has also exposed issues with India's food safety regulatory system.

An editorial on the site foodnavigator.com stated, "[In] a country where food standards regulations are often ignored with tragic consequences, will the authorities continue to pursue local corporate transgressors through the already overworked court system? This is unlikely."

Nestle says its own tests did not detect toxic metal and it is fighting Indian regulators in court, challenging the accuracy of India's food testing and demanding retesting.

Nestle's shares, meanwhile, slumped 2 percent the day after news of the Indian government's class action.