On the instructions of the Food Safety and Standard Authority of India, which described the tests conducted in Goa as not up to the mark, fresh Maggi noodles samples were then sent to the Central Food Technological Research Institute in Mysore, Karnataka for another round of tests, which have only now confirmed the Goa FDA's results.(Maggi Mess: Nestle India Reports First Quarterly Loss in 15 Years)"CFTRI reports re-confirm the consistent analytical results findings of the State FDA Goa laboratory, in which all the said five samples of Nestle's Maggie are declared to be conforming to the requirements of the Food Safety and Standards Rules/Regulation 2011," Veljee said. Lead in all the five samples was "reported to be well below the permissible limit as well as negative for the MSG in the said samples, which analysis was performed separately on the noodles and taste maker", he added.(We Will Remove 'No MSG' from the Maggi Noodles Label: Nestle's Global CEO)
Encouraged by these recent findings, shares of Nestle India rose sharply by over 10 per cent. The shares of the company jumped 10.17 per cent to Rs 7,000 on BSE. On NSE, the stock rose 10.19 per cent to Rs. 6,998. Maggi used to contribute around 22-25 per cent to the company's topline and 30 per cent to its company's profitability, according to Kotak Institutional Equities. Last month, the company reported its first quarterly loss in at least a decade after many states in India ordered a ban and the country's food safety regulator ordered a recall of Maggi products.(Excess Lead Found, Food Inspectors Order Recall of Maggi Noodles)
A popular daily also reported that Nestle India is considering beefing up its advertising spends dramatically, to overcome its recent fall in profits. They reported that the company, that has traditionally been conservative about advertising-in 2014, the company spent just 4.48% of sales revenue on advertising and promotion, was looking at increasing the spends to gain back market share.
Industry analysts agree that this is one of the strategies that Nestle India may employ to get their balance sheet back on track. Nestle India Ltd will also focus on growing its dairy, coffee and confectionary businesses, its new boss said. Suresh Narayanan, who was named managing director of Nestle India last week, said his priority would be to expand other business segments to reduce the company's reliance on Maggi. With inputs from PTI & IANS