Government seeks Rs 640 crore in damages from Nestle over Maggi
NEW DELHI: The consumer affairs department on Tuesday filed a complaint against food major Nestle India with the National Consumer Disputes Redressal Commission (NCDRC) seeking damages of Rs 640 crore alleging that the company sold unsafe and hazardous products – Maggi noodles – to millions of consumers endangering their health. It has also alleged the company indulged in misleading and deceptive advertisements and also resorted to unfair trade practices to earn “unjust profits”.
While dragging the firm to NCDRC on behalf of “millions” of consumers the department has appealed to the apex commission to direct Nestle India to deposit the amount in Consumer Welfare Fund as permissible under the Consumer Protection Act. Moreover, it has sought imposing 18% interest on the damage claimed till the actual payment is made by the firm. The department’s complaint also mentioned that the claim for damage could increase as and when more disclosures and findings about the “unsafe” products surface.
In its prayer, the department has said, “The punitive/ exemplary damages are significant in the present case and are intended to reform and deter the opponent and other food companies from engaging in conduct similar” to that of Nestle so that the common public does not suffer and is not helpless to protect its health and wellbeing. The complaint was vetted by additional solicitor general Sanjay Jain.
Alleging that by its unfair trade practices as well as defective and hazardous products it has caused injury to millions of consumers, the department has sought “class action” against the company.
In a statement Nestle India said, “We are yet to receive official notice about the complaint filed before the NCDRC. Our current knowledge on this issue is only basis media reports. We shall be able to provide substantive response after we receive the official papers. We thank you for your understanding.”
Justifying the steep damage claimed, the department has referred to studies to show how the popular snack posed greater threat to children and pregnant women due to high level of lead and MSG contents. It has referred to advertisements by the company promoting the products stating “Health is enjoyable” and with the concept of “taste bhi, health bhi” despite containing lead.
“The opponent’s trade practices for the purpose of promoting the sale of its products, however, were executed through statements both written and by visible representations, including targeted advertising, to represent to the Indian consumers, attributes of the products, that were misleading and deceptive,” the complaint said.
While it has referred to the test reports of Maggi noodles by government accredited labs showing high level of lead content in the food product, the department has also highlighted how the company was manufacturing and selling Maggi Oat Noodles without approval of the food regulator, FSSAI. It has alleged that Nestle indulged in a practice that falsely represented the product as being approved by the regulator.
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The complaint also mentions how the products have been extremely popular amongst children and the younger generation, with many school and college canteens selling the product. “As a matter of fact, the opponent company’s advertisement campaigns have always been centered on children and mothers and have sought to promote sales on this precious mother and child bond,” the complaint said.
The department has charged Nestle of indulging in unfair trade practices by false labeling of the Maggi Noodles in as much as it states ‘No added MSG” prominently on the packet, despite the presence of MSG.
The department has also referred to several court cases where courts pronounced judgments holding companies guilty of unfair trade practice because of misleading advertisements.