Maggi fiasco hits flour mills

The Maggi fiasco has left a section of flour millers, who were major suppliers to Nestle India, in a soup. It is estimated that about 70-80 flour mills across the country supplied about 1,800 tonnes of maida, the finely milled and refined wheat flour, per day to the company that operated about five noodle making units.

“The ban on Maggi has hit the flour millers dependent on Nestle India badly. While few have closed their operations, some others have scaled down their production,” said VK Bansal, Senior Vice-President, Roller Flour Millers’ Federation of India. Bansal, who ran a dedicated flour mill for the Nestle plant at Nanjangud, near Mysore in Karnataka, has closed the unit.

Nestle was forced to withdraw and recall all the nine variants of its Maggi instant noodles following the ban imposed by the Food Safety and Standards Authority of India (FSSAI) after detection of high levels of lead and presence of taste enhancer monosodium glutamate (MSG) from samples drawn across various States last week. FSSAI had said these products are “unsafe and hazardous” for human consumption and had asked Nestle to stop further production, processing, import, distribution and sale of the said product.

Nestle operated company-owned noodle manufacturing plants in Punjab, Goa, Uttarakhand, Karnataka and Himachal Pradesh besides engaging contract manufacturers in States such as West Bengal and Delhi. Maggi was among the fast moving brands in the country and Nestle had developed a string of ingredient supplier ecosystem over the past three decades in the areas around its factories.

Noodle and pasta makers accounted for a sizeable chunk of the maida produced in the country and Maggi was the largest buyer among these players.

“It is a big set back to the flour millers, who were suppliers to Nestle and other pasta and noodle makers. They have been forced to scale down their operations following the ban on noodles,” said Veena Sharma, Secretary of the Roller Flour Millers Federation of India. Though a section of millers think that this could be a temporary phase, it may take some time to tide over the crisis. “The millers are keeping their fingers crossed,” Sharma said.

However, the impact of the Maggi ban has, so far, not influenced the prices of maida and other flour products. The annual turnover of the flour milling industry in India is estimated at over ₹12,000 crore.

COMMENT NOW