Nestlé's noodles face more scrutiny in India

NEW DELHI--Months after Nestlé SA resumed selling its popular instant noodles in India following a food-safety scare, regulators on Thursday delivered a fresh jolt to the world's biggest food company, saying tests had detected higher-than-permissible levels of ash in the product.

Food-safety inspectors in the northern state of Uttar Pradesh said they filed a lawsuit accusing Nestlé of "substandard" practices on Wednesday after ash content in samples of its Maggi 2-Minute Noodles was found to exceed the legal limit, said Vijay Bahadur, an assistant commissioner at the state's Food Safety & Drug Administration.

Nestlé maintained its noodles were safe to eat and said the root of the problem was ambiguous rules for testing products like instant noodles in India. It added the ash in its noodles wasn't hazardous for human consumption, and was made up of residues from the oxidation of minerals like calcium and potassium.

Still, the announcement will come as a blow to the Swiss giant, which had just begun to recover from a food-safety crisis in India.

Nestlé's woes began last year after the same state department alleged its Maggi noodles contained dangerously high levels of lead. Tests in some other states echoed these findings, leading the Food Safety and Standards Authority of India, the national food-safety watchdog, to ban the sale of the noodles in June.

Nestlé pulled millions of packets of noodles from store shelves and burned them in cement kilns, even though it said its own tests hadn't detected illegally-high amounts of the toxic metal.

The company challenged regulators' tests and raised questions over India's testing techniques and capabilities in court. Later, court-ordered retesting of the noodles failed to find any lead or other harmful ingredients. Nestlé resumed sales of the noodles in November.

The recall cost the company millions of dollars in lost sales and tainted its reputation in the South Asian nation. Net profit at Nestlé's Indian unit was sliced by more than half in 2015 compared with a year earlier, with sales sliding 17%. One in every five dollars the company earned in India before the recall came from its Maggi noodles, its best-selling product here.

Nestlé had just begun to claw its way back to the top of the noodle market when news of the fresh lawsuit broke Thursday.

Food-safety regulators in Uttar Pradesh said they tested the noodles as they would test ready-to-eat pastas. Nestlé said this approach was flawed.

"Standards for macaroni products are being applied for instant noodles with seasoning which is erroneous and misleading," Nestlé's Indian arm said in an email. "We categorically reiterate that testing of instant noodles against norms set for macaroni products will reflect in incorrect results and wrong interpretations," the company said.

India doesn't have specific standards to test products like instant noodles. India's food-safety watchdog attempted to set testing standards in the wake of the food-safety scare last year, and directed food inspectors to test instant noodles as they would test ready-to-cook pastas.

At the time, Nestlé and other consumer companies opposed the move. In a letter to the food-safety watchdog, the Confederation of Indian Food Trade & Industry, a body that represents companies like Nestlé, Unilever PLC, PepsiCo and Coca-Cola Co., among others, had asked the regulator roll back this directive.

"Noodles and pasta are two different types of food products...Kindly withdraw the advisory to avoid confusion and chaos in enforcement officers as well as within the industry," the body said in the letter, a copy of which was seen by The Wall Street Journal. It further appealed the regulator to set different standards for testing instant noodles. "This will remove ambiguity and bring transparency," it added.

Nestlé has also raised concerns over testing delays in India's overburdened and understaffed state-run laboratories. Lawyers for the company had argued in court that samples take several months to be tested, during which they could be contaminated.

Mr. Bahadur, the food-safety official in Uttar Pradesh, said his department collected samples of Nestlé's noodles from the market mid-last year. Test results, including those that detected higher-than-permissible levels of ash, came out in February, he added. It wasn't immediately clear when the noodles were tested.