The Food Safety and Standards Authority of India (FSSAI) has taken a tough stance regarding the quality and marketing standards of health products related to newborns and young children across the country. The regulatory body has initiated formal prosecution proceedings by registering three separate legal cases against multinational FMCG giant Nestle India Ltd for alleged violation of statutory standards in popular children's food and nutrition products. Laboratory tests conducted by the regulator found that one of the company's follow-up formula products contained trace amounts of the essential micronutrient 'biotin' below government limits, while two other premium baby foods flouted legal restrictions on promotional claims. As soon as the news of this regulatory action came out, huge selling of the company's shares started on Dalal Street, which created panic among the shareholders. NAN Excela Pro 1 and Lactogen Pro accused of misleading promotions in e-commerce ads Food regulator FSSAI conducted a detailed review of the marketing materials of Nestle's infant nutrition products being displayed in various e-commerce platforms, retail portals and digital advertisements. This extensive investigation revealed that the company was promoting its highly popular product 'NAN Excella Pro Stage 1' with aggressive health benefits claims associated with 5 HMOs and high quality whey protein. In parallel, the advertisements for the company's other widely selling baby food 'Lactogen Pro 1' were promoting that the whey protein present in it was highly digestible and easily digestible for the delicate digestive system of babies. Food safety officials have expressed serious objection to the fairness and scientific basis of these claims and have sought an immediate written explanation from Nestle India on such marketing campaigns. Blatant disregard of IMS Act 1992 and Regulation 4(2): There is a legal ban on promotion of baby food The authority has clearly underlined in its charge sheet that both the products of Nestle India are in direct violation of Regulation 4(2) of the Food Safety and Standards (Infant Nutrition) Regulations. Under this specific legal provision, there is a complete ban on any kind of promotional, health or nutritional claims made by any manufacturer or brand in relation to baby food for the purpose of increasing sales. Additionally, the regulator stressed that the aggressive advertisements of both these products have seriously violated Section 3 of the landmark 'Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992' (IMS Act). This law makes it clear that any commercial promotion, advertising or misleading marketing of any infant food sold as a breast milk substitute is completely unlawful, in order to protect the nutrition and breastfeeding of newborn infants. Follow-up formula failed in laboratory test: Biotin was found less than the prescribed standard even in the referral lab. The second and most serious technical aspect of this legal action is related to a follow-up formula of Nestle India. When the samples taken by the authorized team of FSSAI were chemically tested at the primary government food laboratory, the test report found that the amount of essential vitamin 'Biotin' in the product was much less than the minimum nutritional limit prescribed under the Food Safety and Standards Rules. When questions were raised by the company on these results, under the law the samples were sent to the country's highest referral laboratory (Referral Food Laboratory) for re-testing. However, retesting by the referral lab also confirmed that the product was not meeting the minimum amount of biotin specified. After finding deficiency of this vitamin which is very essential for the physical development and metabolism of children, the regulator decided to take judicial action considering it as playing with child health. Three separate legal cases filed: Nestle India's stock slipped 1.82% in the stock market In view of this double disregard of rules – misleading promotion on one hand and lack of nutrition on the other – FSSAI has filed three independent legal cases against Nestle India Limited over three different products. The direct impact of this strict regulatory clampdown was seen on the company's performance in the stock market on Friday. At the time of the news becoming public, Nestle India's shares were trading at Rs 1,347, down 1.82 per cent or about Rs 25, on the National Stock Exchange and Bombay Stock Exchange, whereas its previous closing price was Rs 1,372 per share. Market analysts believe that due to increasing strictness on food safety standards and legal cases, FMCG majors may face huge compliance costs and brand reputation challenges in their infant nutrition categories in the near future.
