Explained: Why Nestle India is under radar over baby food product; m-cap dented

Nestle India has come under the radar of authorities after a damning report released by two public interest groups accused the FMCG major of selling baby food products with “added sugar” in developing countries like India. On the contrary, the same product sold in Europe and other developed parts of the world are “sugar free”, the report claimed.

The report was released by Public Eye, a Swiss NGO, in coordination with the International Baby Food Action Network (IBFAN). After its findings were disclosed on Thursday, April 19, Nestle India’s market capitalisation (mcap) eroded by ₹8,137.49 crore to ₹2,37,447 crore. At the NSE, shares of the company declined by 2.94% to settle at ₹2,471.

What the report says

As per the report, Nestle sold baby products with higher sugar content in less developed South Asian countries including India, and African and Latin American nations as compared to its markets in Europe.

Around 150 different baby products sold in different countries were studied, IBFAN claimed.

According to the report, Nestle's wheat-based product, Cerelac for six-month-old babies is sold without any added sugars in the UK and Germany but 15 Cerelac products analysed from India contained 2.7 grams of added sugar per serving on average.

The sugar content was declared on the packaging in India, the report said.

The highest sugar content in the product was 6 grams in Thailand. In the Philippines, sugar content was found to be 7.3 grams in five out of eight samples tested and the information was not even declared on the packaging, according to the report. Under regulatory radar

The Food Safety Standards Authority of India (FSSAI) has taken cognisance of the damning report, and would examine its findings, reports said. "If the claims are found to be true, necessary action will be taken,” a source privy to the development told the Times of India. An official statement from the apex food regulatory body was not issued yet.

The National Commission for Protection of Child Rights (NCPCR) also took note of the report. In a release, the statutory body said it has requested the FSSAI to undertake a comprehensive review of the sugar content in baby food products sold by Nestle and other companies.

“As per the report, certain baby food products manufactured by Nestle may contain added sugars, which could potentially harm the health of infants and young children. Given the vulnerability of this population group and their unique nutritional needs, it is imperative that baby foods meet strict standards for nutritional quality and safety" the NCPCR stated.

How Nestle has responded

Under flak, a Nestle India spokesperson told the media that the company has reduced added sugar in baby food products in India by over 30% in the past five years. "We regularly review our portfolio and continue to innovate and reformulate our products to further reduce the level of added sugars, without compromising on nutrition, quality, safety, and taste.”

"Reduction of added sugars is a priority for Nestle India. Over the past 5 years, we have already reduced added sugars up to 30 per cent, depending on the variant,” the spokesperson added.

Nestle India asserted that its "infant cereal products are manufactured to ensure the appropriate delivery of nutritional requirements such as protein, carbohydrates, vitamins, minerals, iron etc. for early childhood".

"We never compromise and will never compromise on the nutritional quality of our products. We constantly leverage our extensive Global Research and Development network to enhance the nutritional profile of our products.”

With PTI inputs