Maggi Controversy - What the Lead Leads to
As the contingent of states taking up arms against Nestlé’s Maggi noodles increases, we take a look at the controversy and what it could mean for you.The ProblemRandom testing of Maggi noodles revealed lead (2.5 to 5.0 ppm) and MSG content excessive of the prescribed safe limit (2.5 ppm). This has led to the ban of storage and sale of magi in multiple states - Delhi, Maharashtra,...
Random testing of Maggi noodles revealed lead (2.5 to 5.0 ppm) and MSG content excessive of the prescribed safe limit (2.5 ppm). This has led to the ban of storage and sale of magi in multiple states - Delhi, Maharashtra, Punjab, Assam, Bihar, Madhya Pradesh, Tamil Nadu, Jammu and Kashmir, Gujarat, Uttarakhand and Goa while others continue to test samples.
On its website, Nestle continues to claim that its product is safe of human consumption, and has passed all in – house tests.
For a Consumer
Lead is a heavy metal that is not excreted. It persists in soft tissues for upwards of a year, and accumulations in bones may persist for 30 years. It has deleterious effect on nearly all systems of the body, resulting in damage and eventual shut down. In children, lead has been known to cause intellectual disabilities and mental retardation. It hampers brain development, delayed growth and behavioral problems. Even in adults, it affects the nervous system, causing a marked decrease in IQ.
Lead is a direct cause of hemolytic anemia, and can also cause significant suppression of the bone marrow. It increases the risk of hypertension. High concentrations of lead cause renal damage, leading to chronic renal failure. Lead is toxic to hepatocytes (liver cells) and is associated with hepatic impairment.
High levels of lead in the blood have been linked to low birth weight, premature deliveries, miscarriages, still births and fetal abnormalities. Lead accumulations in bone, though nascent, may be remobilized during pregnancy and be teratogenic to the fetus. Thus, past consumption of lead may also be deleterious in pregnant women.
Monosodium Glutamate (MSG) is a flavoring agent almost ubiquitous in Oriental foods. A tastemaker of dubious safety, it has been popularly linked to what is known as the Chinese restaurant Syndrome, characterized by migraines, flushing, palpitations, sweating, chest pain , nausea and weakness. As highlighted by Dr. Russell Blaylock in his book “Excitotoxins: the Taste that Kills”, SG is an excitotoxin. It has the potential to overexcite cells to the point of irreversible damage or death. This can result in brain damage, and may even precipitate learning disabilities, Alzheimer’s, Parkinson’s, ALS and others. Chronic users of MSG show increased obesity, eye damage, fatigue and disorientation, depression and even cardiac arrhythmias and sudden death.
For an Investor
Since May 28, Nestle shares have come down from from Rs. 7,038.65 to Rs. 6,010.80. As one of the biggest sources of revenue for Nestle India, Maggi reported a profit of Rs. 1,185 crore on sales of Rs. 9800 crore in 2014. As stated by Kotak Institutional Equities, it contributes nearly 30% to the company’s profitability.
Barclays, ICICI direct and Kotak Institutional Equities have started to downgrade the stock. Maggi shares have dropped below Rs. 6000 for the first time since December 2014. Most analysts advise investors to avoid the stock till the controversy is resolved. However, a few consider it a golden opportunity for investors to buy premium stock like Nestle.
On behalf of Indian Consumers, the Department of Consumer affairs has filed a case against Nestle in the National Consumer Disputes Redressal Commission (NCDRC) for "unfair trade practices and misleading advertisements" and is seeking financial penalties among other actions.