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Maggi Episode & Indian FMCG Sector

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It could be a mere coincidence, but the decision of the Food Safety and Standards Authority of India (FSSAI) to ask Nestle for a nation-wide pull out of its popular Maggi brand instant noodles comes at a time when India is fine tuning its “food recall” rules.
 
Nestle may have been ordered to recall all its noodles pack from the shelves, but how to do it is Nestle’s headache at the moment as the country is yet to frame its food recall procedures. The mammoth exercise, initiated by Nestle to pull out Maggi noodles from close to four million retail outlets, is hence, a kind of dry-run before India’s food recall rules comes in place. And also a live-demonstration and warning for other FMCG players who are into the food segment. 
  
 It was in April 2015, the ministry of health and family welfare notified the draft “Food Safety and Standards (Food Recall Procedure) Regulations, 2015”, which explains the exact procedures companies should follow in the eventuality of a “Maggi” like incident. The rule can be finalised anytime after six months of the draft notification.
 
The rule will guide the food business operators on how to establish a written ‘Recall Plan’ for executing the food recall process in case the food is determined unsafe and to protect the health of consumers in such a situation. It will help lay  down  the  complete  process  of  recall,  post-recall  report, closure  of  the  recall  process  and  follow-up action in order to ensure the effectiveness of the recall and prevent a recurrence.
 
The eight point recall plan, according to the current draft, begins with the setting up of a recall management team consisting members from the production, quality, sales, legal, purchase, technical, media departments of the company. Instructions to identify and correct the problem, to maintain a recall notification contact list, sourcing production and distribution records are all part of the plan. The documentation of every step of recall process is also mentioned. 
 
Though the draft will undergo further changes as stakeholder recommendations are also considered before finalising any rule, the message is very clear. Nine years after the government constituted the FSSAI through an Act that consolidated all the laws relating to food including the Prevention of Food Adulteration Act, 1954, it has woken up to need to operationalize one of the key features of the Act – the food recall norms. 
 
By deciding to pull out its popular instant noodle brand Maggi off the shelves in India, Nestle has created a record-of-sorts. It is the first time a product recall of this scale is being attempted in the country. Reports suggest that Nestle may not be able to connect with all the retail outlets that sell its products because, a good number of the outlets that sell Maggi in the hinterland source it from secondary channels that is beyond the reach of Nestle India at the moment. It was not Nestle that reached out to them; it was the popularity of Maggi that drew them to the product. In the absence of a legislation that gives minute food recall instructions, the company will certainly do its job. 
 
But, it is time for the entire fast moving consumer goods (FMCG) segment – especially the companies that make or market food items – to rework their food distribution strategy, to have a robust recall system in place, if need be. 
 
The obvious message is that India is slowly waking up to the need for strict enforcement of food safety regulations, and non-compliance could put companies and products in a soup. The country’s state level food testing laboratories may not be well equipped to handle this task, the apex regulator - FSSAI – may not be having sufficient manpower to do justice to the mammoth job at hand, but the chances of food companies being pulled up for flouting the rules and selling “unsafe” products is no more a mere theoretical possibility. The merit of the Nestle case will be decided by the courts, but the signal for the FMCG industry is clear. 
 
That is the message “Maggi controversy”, is giving to India’s FMCG sector.


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