Nestle has given an initial indication of the financial impact of the recall of Maggi noodles that Indian regulators allege are tainted with excess lead.
The company said it expects stock and related materials worth around INR3.2bn (US$49.9m) to be destroyed.
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A spokesperson for the company told just-food the company is "in the process" of withdrawing stock worth around INR2.1bn from the market. In addition, the company said Maggi noodles and related materials in factories and distribution centres when the withdrawal was announced were valued at around INR1.1bn. "These are broad estimates and the final figure will have to be confirmed at a later date," the spokesperson stressed.
The full cost of the recall, sparked by tests from food safety regulators that found elevated levels of lead in the noodles, is yet to be determined. "There will be additional costs associated with this withdrawal e.g. bringing stocks from the market, transporting the stocks to the destruction points, destruction cost etc. The above, and other unforeseen costs associated with this withdrawal, will be dealt with in line with the applicable accounting standards at the time of announcing the financial results on the due dates," the spokesperson said.
While Indian food safety authorities have insisted Maggi noodles are "hazardous", Nestle maintains they are "safe" and insists its own testing – and tests carried out by an independent laboratory – found lead levels "well within" those permitted under Indian food safety regulations.
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