Maggi noodles lead scare to cost brand over $250m

Maggi will destroy more than $64m worth of its eponymous instant noodles, which have been declared “unsafe and hazardous” by the Food Safety and Standards Authority of India (FSSAI), following the discovery of “higher-than-allowed levels of lead” in some noodle packets.

However, a brand expert estimates that the ban could be even more costly to the Maggi brand, estimating the loss in brand value will exceed $250 million.

Maggi, a subsidiary of the Nestlé group, had a brand valued at US$2.4bn prior to the food safety ban, which positioned it as the 23rd most valuable food brand in the world.

Brand Finance CEO David Haigh commented: “Any health concerns raised by a credible source such as the FSSAI will most certainly damage customer loyalty and consideration of a food brand. As Maggi’s parent company, Nestlé will have to turn around swiftly to ensure that the Maggi brand can retain its dominance in the Indian market. If not, the Nestlé brand itself could be at risk as the Nestlé logo prominently features on the back of Maggi noodles packaging, making it synonymous with the Maggi brand.”

Nestlé has decided to challenge the high court while also raising “issues of interpretation” of India’s food safety laws.