Nestle cuts full-year outlook after 9-mo sales miss

Nestle said it will fall short of its long-term growth target for a third consecutive year, highlighting the volatile conditions in emerging markets that continue to weigh on European consumer-product companies and retailers alike.

The company said it will now commence manufacturing and will sell “only after the newly manufactured products are also cleared by the designated three laboratories”.

Shares of Nestle India surged over 7 percent intraday on Friday after its popular noodle brand Maggi was tested safe.

The Bombay High Court ruled in August that Nestle could resume making and selling the noodles in six weeks if new tests showed they were safe.

Nestle India got respite from Bombay High Court recently where the Court held that the Government did not get the Maggi samples tested in accredited labs. The British-Dutch company said it had double-digit growth in China, bolstered by online sales.

The apex consumer court on Thursday for the first time ordered tests on 13 samples of Maggi noodles from nine batches to determine lead and “MSG stock glutamate” content.

India’s food regulator – the Food Safety Standards Authority of India or FSSAI – later banned the snack, ruling it “unsafe and hazardous”.

The Consumer Affairs Ministry had also filed a class action suit against Nestle India seeking about Rs 640 crore in damages for alleged unfair trade practices, false labelling and misleading advertisements.

The NCDRC said the Maggi samples should be sent to the Central Food Technological Research Institute (CFTRI) in Mysore in Karnataka after verifying the seal and samples in the court’s presence.

Paul Bulcke, Nestle’s chief executive, said: “After a good performance in the first half of the year we were impacted in the third quarter by exceptional events, with Maggi noodles in India and a rebate adjustment in Nestle Skin Health”.