FSSAI takes legal action against Nestle India over infant products
What's the story
The Food Safety and Standards Authority of India (FSSAI) has launched legal action against Nestle India for multiple violations of the Food Safety and Standards Act. The regulatory body has filed three adjudication cases against the FMCG giant, targeting its Infant Nutrition, NAN Excella, and Lactogen products. Following the news, Nestle India's shares fell by over 2% on September 18.
Regulatory concerns
NAN Excella Pro Stage 1, Lactogen Pro 1 contravened regulations
The FSSAI discovered that promotional claims for "5 HMOs" and "Whey Protein" in NAN Excella Pro Stage 1, as well as a claim about Lactogen Pro 1's "Whey Protein" being easy to digest, violated regulations.
Both products were found to contravene Regulation 4(2) of the FSS (Foods for Infant Nutrition) Regulations, 2020.
The regulation prohibits promotional claims/material intended to increase the saleability of infant foods.
Legal proceedings
Follow-up formula sub-standard in biotin content
The FSSAI has also flagged a follow-up formula manufactured by Nestle India for being sub-standard in Biotin content during laboratory analysis.
The sample was sent for re-analysis but failed to meet the prescribed Biotin requirement under the 2020 regulations.
In light of these violations, three separate adjudication cases have been filed against Nestle India concerning these products.
Market impact
Nestle India's shares fall over 2%
The news of FSSAI's legal action against Nestle India has impacted the company's share prices.
On September 18, the shares were trading at ₹1,364.90per share on NSE, down 2.3% from the previous close of ₹1,370.60.
The decline is a stark contrast to the NSE Nifty 500 index, which has fallen by over 10% this year.