THE MAGGI FIASCO

Excellent article! Corruption in India never ceases! Pass this on.
'Make in India' ??? Perhaps even good samples have to pass this procedure to 'pass' the test[s].

An interesting and well reasoned piece. It once again raises the question of whether it is desirable to do business in India. Every thing from Parliament to Gram Panchayat and from top bureaucrat to peon, everything is contaminated. Then we allow them to pass laws which calls honest citizens as "Chor". How can we remove this contamination.

Maggi Fiasco – Not As Simple As It Seems!

Author – Anil Chawla

Let me at the outset make it clear that I hold no brief for Nestle. I have never had any business connections with Nestle. Moreover, personally I have never liked eating Maggi noodles and have always discouraged my children from the same.

Having clarified the above points, let me also add that I have been watching Indian food industry for almost three decades from close quarters. No one who has any exposure to food inspectors and government food laboratories in India will vouch for their honesty. Everyone knows too well that the whole setup is notoriously corrupt. In most districts of India, it is the Food Inspector’s solemn duty to ensure that the Collector’s residence receives adequate groceries (of course, free of cost). Every retailer, distributor and manufacturer dealing in food products has a regular system of greasing the palms of food inspectors so that they are cooperative. The food inspectors regularly collect samples and send them to the designated laboratories where officers of concerned manufacturers take care of the officers and get the samples passed. Even if one has the best product quality, one will be a naïve fool to expect one’s product samples to clear the laboratory tests unless properly stuffed envelopes are given to the right hands. The whole system is a very well-oiled machinery that food industry insiders know and stick to.

Having understood the basic eco-system of Indian food industry, let us now try to understand the Maggi fiasco. Surely, there must have been innumerable times when samples of Maggi noodles were picked up by some food inspector or the other somewhere in India during the past three decades. It is also certain that all such samples duly cleared all tests conducted at various government laboratories across the country. After having passed all tests for three decades, suddenly something went wrong and the samples started failing in April / May 2015.

There is no reason to suspect that Nestle, the makers of Maggi noodles, made any changes in the manufacturing process of their noodles in the past few months. They have a set formula which has been successful and they have been following it for past more than three decades. If this is true, there appear to be only three possibilities:-

Option A – Nestle was getting samples of Maggi noodles passed using the time tested method of stuffed envelope below the table for so many years; suddenly some food tester turned honest and refused to accept the envelope and spilled the beans. Government of India and all state governments want us to believe that this is indeed the case. If Magi noodles were clearing all tests before April 2015 even though they contained all the harmful ingredients, the governments should first of all start prosecution against all the food laboratory scientists who gave the false reports. If food inspectors were not picking up Maggi noodles samples since their hands were properly greased, prosecution should be launched against all such food inspectors. Ironically, while there is talk to taking action against celebrities like Amitabh Bachhan and Madhuri Dixit who endorsed Maggi, no one is talking about putting the government food testing establishment behind bars.

Option B – The theory that some food tester developed conscience may well be true, but it seems more likely that the growth of this honest conscience was aided by dollops of cash handed by a competitor. For example, if the going rate for clearing a sample is, say, Rs. 10,000- a competitor may go to the scientist at the laboratory and offer, say, Rs. 100,000- for failing the sample. After all the scientist has only to shift a decimal a bit to the right – lead content has to go up from 1.70 ppm to 17.0 ppm. Everyone needs money and a lakh of rupees to just shift a decimal is a temptation too strong to resist. If this sort of deal is struck the company whose samples are being tested will suddenly find the doors at the laboratories closed and language of people who used to bow to them in past change suddenly. Let us say, a competitor of Nestle budgeted only Rs. 1,00,00,000- (Rupees One Crore / Ten million), it may be sufficient to get Maggi samples show all sorts of harmful substances at more than ten government laboratories across the country. That is surely small money when one is out to destroy a market giant with annual sales of more than Rs. Thirteen Billion.

Option C – The third possibility is that Nestle did not need a competitor to knock it down and they might have done a self-goal. Negotiation of bribery rates is an ongoing process in Indian system. Years ago, it was customary to hand over a five-rupee note to peons in government offices. Now, a five-rupee note will get you a contemptuous look. To get an appreciative look of obligation, a fifty rupee note has become necessary. Government officers, inspectors, testers, engineers etc. keep raising their rates as it pleases them from time to time. Surely, the ones handing over money do not like it and some haggling takes place. But often it is like a goat negotiating with a wolf, who is bound to win at the end. Nestle officials may have refused the enhanced demands of some officials of the government food standards establishment and landed up a fiasco beyond their wildest nightmares.

The above three options are conjectures. I have no way of knowing what exactly happened. But based on my discussions with food industry insiders and also based on my own experience, I can assert that one of the three scenarios is most likely to have happened.

Irrespective of the exact turn of events that preceded a sudden showing up of harmful substances in a brand that had been sold for three decades without any major consumer complaints about health, let us now look at the actions of various state governments and also of central state government. It seemed that the governments fell over one other in their eagerness to ban the product. No government seemed interested in even hearing the company’s side of story. No inspections were ordered to be carried out at the company’s manufacturing facilities. Obviously, no company could be stupid enough to add lead to its products. If lead is showing up in the test reports, will it not be proper to analyze the cause of appearance of lead? Surely, governments could have constituted a panel of experts, including some international ones, to carry out thorough and transparent testing of Maggi noodles. There is no denying that the present system of testing in Indian government laboratories is opaque and is not in line with the way science is conducted.

The reason why I have chosen to write about the issue is not because I have any sympathies with the makers of Maggi noodles. I am more concerned with the damage that this whole episode has done to the reputation of India as a place to do business. A country, where the government does not believe in appearing to be fair and scientific in all its decisions, cannot command respect in the global arena. Let us face it that the state governments and also the central government have acted in a knee-jerk manner. The governments could have done more to show that they are mindful of their actions; that decisions involving billions of rupees must be based on scientific tests that are beyond all doubts; and that principle of natural justice of giving opportunity to the accused company to prove innocence is duly followed. In case Maggi noodles contain all the harmful substances that they are alleged to contain, surely Maggi noodles must be banned and all company officers in knowledge of the product must be put behind bars. But if this is indeed the case, all food laboratory scientists who passed Maggi noodles in the past must also be put behind bars; Government officers who allowed Maggi noodles to be sold for so many years must not be allowed to escape punishment.

Before I conclude let me give an instance of action by Indian food standards establishment which benefited a multinational food company and destroyed many small traditional sweetmeat shops. A few years back, suddenly there were raids on mawa / khoya (a product made by drying of milk in a hot pan) across most of North India. Tons of mawa was seized as adulterated. Even before the mawa could be sent to laboratory for testing, newspapers were screaming about the great job that had been done. Newspapers started writing editorials about how people should avoid eating sweets made of mawa. In other words, the message was to shun traditional Indian sweets and shift to chocolates. At the same time, Cadbury launched an advertisement blitz with Amitabh Bachan talking about “Kuch Meetha Ho Jai” (Let us have something sweet). Cadbury’s campaign was clearly trying to position chocolates as any-time sweet for adults (instead of an indulgence for children) clearly targeting the slot occupied by traditional Indian sweets till then. It is indeed ironical to allege adulteration in mawa and shift to chocolates. Most samples of mawa were found to be adulterated with vegetable oil, a harmless food; while chocolates have large quantities of vegetables fat. There were no complaints of any widespread health hazard caused by consumption of mawa. Large numbers of food poisoning cases are reported every year across the country due to spoilt paneer (cottage cheese), but the authorities were not interested in collecting samples of paneer. They were only interested in breaking the back of the mawa and traditional Indian sweets industry. Unfortunately, they succeeded. Sales of Cadbury chocolates have soared in the past few years as people have moved away from mawa-based sweets. I am not in a position to directly allege that Cadbury masterminded the whole campaign to malign mawa, but if you point the finger of suspicion in that direction it is your decision.

Whether it is the traditional mawa-based sweets or Maggi noodles, the fact is that Indian food standards establishment and the governments as well as media, who act based on their inputs, have not acted in a manner that we Indians can be proud of. The issue is not about Maggi noodles or mawa-based sweets. The issue is about the reputation of India as a place to do business. Let us use the Maggi fiasco to set our house in order!

Anil Chawla

7 June 2015