Maggi conrovery has messed up Bake in India plans..(But should we just look from the investment angle)

A different take on Maggi noodles controversy.

It says the controversy has led to questions over Bake and Make in India plans:

As Nestlé SA clambers to recall 400 million packets of instant noodles in India, its struggle serves as a cautionary tale for all the food companies that have recently rushed in to set up shop in Asia’s third-largest economy.

Food processing has been one of the hottest industries in India in recent years, attracting billions of dollars in investment from abroad. Only the pharmaceutical industry has had more foreign direct investment growth in the last five years, government data show. Total FDI in India’s food-processing industry grew more than 500% to $6 billion in the five years through March. International investment in the pharmaceutical industry grew close to 700% over that period.

While other sectors—including telecommunications, construction and services like banking and outsourcing—have attracted more dollars, none have seen more growth than food and drugs. Global food and beverage brands tend to be trail blazers in developing markets. They are often among the first to recognize the potential in countries like India. PepsiCo Inc., Unilever PLC and others arrived in the country decades ago and have been investing ever since.

A country with a billion consumers and rising incomes is a no brainer for consumer-goods companies. Whether its chocolate bars, carbonated drinks or frozen french fries, the middle-class households of the subcontinent are getting increasingly addicted to the taste and convenience of readymade foods. Global brands, including Mondelez International Inc., Danone SA, Mars Inc., Kellogg Co., Kraft Foods Group and McCain Foods Ltd., have been piling into the country to serve them.

Nestlé has been in India more than a century. As it grew with the market its staff in the country has grown to more than 7,000 people and its sales have ballooned to more than $1.5 billion. With all that experience, Nestlé should have been able to head off its food scare but it says it was caught off guard by an unexpected interpretation of some basic rules.

Indian food safety regulators say they found illegally high levels of lead in packets of the food giant’s popular Maggi 2-Minute noodles. Nestlé  has recalled the noodles but is taking the regulators to court, asking for a ruling on the correct way to test noodles. The Maggi noodles contain two main components—noodles and flavor packets.Regulators tested each separately and found that the trace amounts of lead in the flavor powder were much higher than is allowed by regulations. Nestlé says the noodles and powder should have been tested together.

Indian regulators are trying to protect consumers but the fact that the one the biggest foreign investors in the country, from one of the sectors that invests the most in India, was caught off guard shows just how tough it can be to do business in India. 

As Prime Minister Narendra Modi has pledged to clarify regulation to convince more companies to “Make in India,” cautious global executives are bound to ask how one of the industries that has been the most enthusiastic about building factories and creating jobs in his country has become so entangled.

Hmm.. This is fine but should one allow companies to keep giving us poor quality of food just because they bring in FDI.

Look, most of us have grown up on Maggi. This has led to huge surge in processed and ready made food over the years in India. But it has had side effects as well. This article notes how big food, big auto and big pharma have forced lifestyle changes on India and all this is not for the better really.

The big food in particular has distorted India’s food habits bigtime as well. All these foods can be cooked instantly but are devoid of the nutrient of natural and fresh food. These processed foods lead to obesity, dullness etc in children. As a result, quite a few schools ask parents not to send any of such food in children’s lunchboxes. Eating right and avoiding these foods has become a major part of children’s early education as well.

Actually the Maggi controversy is a wake up call for the whole food platter we are eating in India. Nothing seems to be right really. Even so called natural fruits and vegetables are all doctored and pesticised to a highly unhealthy level. Some might say lead content in Maggi was much lesser in the other foods we eat. And the water we drink, less said the better.

Overall, make in India is fine and should be promoted. But we cannot allow all kinds of things to continue under this new program. At the end of the day the idea should be to improve lives of Indians better. Same for manufacturing as well. If it leads to pollution and garbage, then there is no point. So whether it is bake in India or make in India, one should look at both sides of the debate.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: