Home Progressive Grocer Maggi fracas could lead to higher food safety standards in india: Nomura

Maggi fracas could lead to higher food safety standards in india: Nomura

By  
SHARE

The Maggi controversy is likely to be the genesis of stricter labelling and food quality norms in India, a Nomura report said.

Maggi noodles fails lab tests again, Nestle disagrees
Ash content in collected samples of Maggi masala was found to be 1.85 per cent

“We see the entire controversy as a stepping stone in the evolution of India’s packaged and processed food industry,” and Anup Sudhendranath of Nomura said in a research note, adding similar tests are likely to be conducted on other similar products and companies.

According to the Japanese financial services firm, the next logical step for the (FSSAI) would be to tighten the labelling, packaging and testing norms for the entire sector, which in turn is positive for the consumer.

“This is a positive from the consumer’s perspective and would help expedite the migration from the unorganised to the organised sector,” Nomura said.

Despite the current controversy, Nomura believes the company is taking all the right actions and will rebound strongly from the same.

“We strongly believe that India will rebound with a revamped product and packaging, which will slowly rebuild the brand equity,” Nomura said and added that some other bigger brands of the company like infant nutrition portfolio and coffee business are likely to remain “insulated”.

In October 2003, Cadbury brand was marred by a controversy when worms were found in their chocolates. However, recovery for the chocolate giant started by late 2004 and by June 2014, things were back to normal, Nomura said.

Another such incident was the coke issue. In 2006, the Centre for Science and Environment alleged that and Pepsi were among a dozen soft drinks that contained high levels of pesticides and insecticides.

However, as was the case with Cadbury, the giants emerged strongly from the controversy with sales of the brand doubling between 2008-14 at a compounded annual growth rate (CAGR) of around 17 per cent, Nomura added.