Nestle India expects over $49m hit from Maggi noodles ban

Nestle's Indian unit will take an over Rs3.2bn (£32.2m, €44.5m, $49.9m) hit from the ongoing withdrawal and destruction of its Maggi instant noodles.

Shares in Nestle India settled 2.14% lower in Mumbai trade on 15 June.

Nestle India, on Monday, said that the estimated sales value of its Maggi stock in the market was worth some Rs2.1bn. It also has Maggi noodles and related products in its factories and distribution centres worth up to Rs1.1bn.

The company said in a statement: "...There will be additional costs to take into account, for example bringing stock from the market, transporting stock to destruction points. The final figure will have to be confirmed at a later date.

"The above, and other unforeseen costs associated with this withdrawal, will be dealt with in line with the applicable accounting standards at the time of announcing the financial results on the due dates."

Nestle has been battling its worst-ever branding crisis in India after a regulator in the northern Uttar Pradesh state found monosodium glutamate (MSG) and excess lead in a sample of its popular noodles.

The company, on 12 June, challenged those findings in court but has to continue with the withdrawal until a verdict is pronounced. The company told the Bombay High Court that food safety authority FSSAI's decision was arbitrary, and questioned the standards of testing behind it, Reuters reported.

Nestle withdrew all varieties of Maggi noodles on 5 June, hours before the FSSAI banned the snack, ruling it "unsafe and hazardous".