________ A to Z kerala .......... [kvk] [www.atozkerala.in , www.atozkerala.blogspot.com]
New Delhi: In the dock over alleged lapses of
food safety standards in its famousMagginoodles, Nestle India has
disclosed having spent Rs 445 core on 'advertising and sales promotion'
last year, while the expenses towards 'quality testing' was less than 5
per cent of such amounts.
Similar has been the trend over the last five years, when the
'advertising and sales promotion' expenses ranged between Rs 300-450
crore annually, while expenditure on 'laboratory or quality testing'
moved between Rs 12-20 crore.
An analysis of the annual financial accounts of the Indian arm of the
Swiss multinational giant Nestle shows that the expenses towards
employees have risen the most in the last five years, up by about 75 per
cent from Rs 433 crore in the year 2010 to Rs 755 crore in 2014.
The company follows a financial year ending December 31. In comparison,
the advertising and sales promotion expenses has risen by 47 per cent
from Rs 302 crore in 2010 to Rs 445 crore in 2014. In the same period,
the 'laboratory or quality testing' expenses rose by 45 per cent from Rs
13 crore to Rs 19 crore.
Experts, however, say that similar trend could be seen at other such
companies as all of them spend huge sums on brand promotions.
The financial accounts of Nestle India further shows that the
expenditure towards heads like 'travelling' and 'training' was higher
than the same towards quality testing.
While travelling expenses has risen by 27 per cent from Rs 54 crore in
2010 to Rs 68 crore in 2014, the training expenditure rose by 51 per
cent from Rs 25 crore to Rs 38 crore in the same period.
The expenditure towards 'market research' was however lower at about Rs
16 crore in 2014, up by about 69 per cent from Rs 9.7 crore five years
ago in 2010.
While it insists that Maggi noodles are safe, Nestle India had to
withdraw the product from the markets after many states banned the
famous '2-minute' instant food after tests showed them containing taste
enhancer MSG (Mono Sodium Glutamate) and lead in excess of permissible
limits.
The central food safety regulator FSSAI has also ordered recall of all
variants of Maggi noodles, terming them as 'unsafe and hazardous' for
human consumption. Besides, FSSAI has also ordered recall of one variant
'Maggi Oats Noodles', which it said was being sold without a product
approval and without undertaking the risk and safety assessment.
Incidentally, Nestle India Chairman A Helio Waszyk and Managing Director
Etienne Benet wrote in their letter to shareholders, published in the
latest annual report of the company, that 'Good Food, Good Life' is
their mission. Stating that India was 'severely impacted by
malnutrition,' they wrote that Nestle India was 'constantly researching
and observing the role that food plays in the lives of consumers across
the income pyramid.'
'Our vision and ambition is to be the recognised leader of Nutrition,
Health and Wellness in India,' the letter said, while adding that Nestle
India was 'focused on understanding the changing lifestyles, evolving
needs, and dietary preferences of consumers'.
The Indian unit, they further said, relies on Nestle's extensive global
R&D network and expertise 'to develop products that enable consumers
to lead better lives and help them to improve nutrition in their daily
diets'.
The company has also been criticised for lacking on the communication
front, with experts saying that Nestle could have contained the damage
if it had reacted swiftly when the first reports started coming in about
the safety standards from Uttar Pradesh early last month.
Future Brands CEO Santosh Desai said there is a question mark now on the
Maggi brand and there is a significant hit on the brand due to the
controversy.
'There is a fundamental doubt due to safety issues. A lot will depend on
how Nestle takes it forward,' he said, while adding that the road ahead
will be a difficult one.
'If Nestle is able to establish testing by authorities were done in a
different way, it could be less difficult. However, if it turns out in
the tests that there were actually issues with Maggi, then it will be
all the more difficult.'
'Either way, there is a serious hit to the brand. The company was slow
to react and uncommunicative in initial days and when they came out with
voluntary withdrawal of Maggi, it was a bit late. This is a company
which is generally not communicative. They could have handle this
better,' he added.
Desai, further said that there is a positive side for the company that
Maggi is a brand which has had a long relationship with consumers.
'There are brands which are not missed by consumers but Maggi is a brand
which had a lot of loyal consumers and people want this brand in their
lives.'
Sounding optimistic, brand expert Harish Bijoor also said he thinks Maggi will come back.
'Companies invest in building brands and create a long enduring image.
When events such as the one related to Maggi noodles happen, the brand
suffers... However, I think Maggi will come back,' he said.
Bijoor is the CEO of Harish Bijoor Consults Inc. When asked about how
difficult it could be for brand Maggi to make a come back, he said it is
a matter of convincing the consumers with integrity.
'I don't believe it would be difficult for Maggi as it has been there in India for 32 years,' he added.
In their letter, Nestle India's Chairman and MD further said that the
company has 'strong brands, a capable organisation, and immense trust
and loyalty' of consumers.
'But as we move ahead in our journey we may need bold changes, swift
adaptation and tough decisions, especially for evolving to a product
portfolio that is more focused on premium and value-up ranges.'
'While doing this we will continue to protect our current business base
and gear up to make the organisation more efficient to take on the
current and future trade evolution and competitive challenges.'
'We are convinced that it is the winning strategy and will strengthen
our ability to provide our consumers with Nutrition, Health and
Wellness.' they wrote.
On Indian markets, the two wrote that there was 'inability to access or
afford nutritious food is causing under-nutrition and related
disorders'.
'It is also forecast that economic growth and related lifestyles changes
will lead to over-nutrition related disorders such as obesity, and
further aggravate the double burden of nutrition.'
'The increasing demand for food from a population striving for a better
life is further compounded by population growth. The economy is
struggling to ensure food and nutrition security even as the demand for
food continues to grow and the land available for agriculture reduces,'
the letter said.
PTI
Kochi : In a major security lapse at the Karripur airport on Wednesday,
passengers of the Air India Express from Sharjah were transported to
the domestic arrival terminal without a security check.
