Nestle India also incurred a one-time loss of Rs 452 crore in the April-June quarter.
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The company’s total income from operations during the period under review declined 19.52 per cent to Rs 1,957.01 crore as against Rs 2,431.97 crore in the same period of previous year. “This quarter has been extremely challenging for the company”, Nestle India managing director Suresh Narayanan said in a statement.
The courtroom was listening to a petition filed by Nestle towards FSSAI’s June 5 order banning 9 variants of Maggi, and Maharashtra authorities’s order prohibiting their sale. Stating the reason, the company said, “It is largely due to the impact of the Maggi noodles issue”.
Quantifying the loss Nestle said, “In addition to loss of sales from the business disruption, “net sales” worth Rs 288.4 crore has been reversed during the quarter in relation to Maggi noodle stocks already sold and withdrawn from the market”. It reiterated its products are safe for consumption and that it recalled Maggi because of confusion in the consumer’s mind about its safety following test reports.
Both FSSAI and FDA have claimed that that they had issued notices to Nestle India protecting in thoughts the well being hazards the product might have had because of the excessive lead content material.
Nestle India, the subsidiary of Swiss food giant Nestle SA, slipped to a second-quarter loss as sales plunged after its hugely popular Maggi noodles were pulled off shelves over safety concerns.
While Maggi accounts for close to 20 per cent of Nestle India’s revenue, Suresh Narayanan, MD, Nestle India, said that the company is doing everything to get Maggi back on the shelves. It said lab tests showed MSG probably due to natural glutamate contained in hydrolysed groundnut protein, onion powder and wheat flour used in packaged foods. The company’s net loss during the quarter stood at Rs 64.4 crore.
The lawyer of Food Safety Standards Authority of India (FSSAI) had earlier argued that it had not banned Maggi, but only asked the company to stop the manufacture and sale as it contained lead beyond the permissible limit.
Total Expenditure (TE) in Q2-2015 declined to Rs 1634.38 crore as compared to the Rs 2000.75 crore in Q1-2015 and the Rs 2008.91 crore in Q2-2014.
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For the year ended December 2014, while the gross sales quantity (in metric tonne) for Nestle in India contracted 0.6 per cent over that in 2013, the PDCA segment witnessed sales quantity rise 3.7 per cent.
