The Indian Government, perhaps rightly so, may have gone after Nestle’s maggi because Switzerland refused to share the details of Indian account holders suspected of stashing black money in several of their banks!
Unofficial assessments put the black money figure from $466 billion to $1.4 trillion! This money belongs to the Indian economy and Switzerland’s initial refusal to share the financial details was frustrating and unfair. The stakes were too high.
Nestle is Switzerland’s top multinational company and derives 30% of its profits from sales in India. Maggi was its star and a significant contributor to Switzerland’s economy as well. It was fortuitous for India that during a routine investigation, Maggi was found to have contained excessive levels of MSG and other chemicals. Investigations were ordered and State after State imposed bans on sale of maggi. Nestlé India reported a net loss of $10m in the three months ending in June due to the ban.
Is it safe to suggest that India was teaching Switzerland a lesson? It may be a small dent compared to the huge amounts in Swiss banks, but at least it sent a strong message.
The last we heard of black money was when finance minister, Arun Jaitley, expressed satisfaction with the way the Swiss authorities were cooperating. They had just released names of two Indian nationals in connection with black money stashed in Swiss banks.
The shroud of secrecy around assets maintained by the Indian nationals in Swiss banks is slowly lifting now.
A few months ago, industrialist Yash Birla’s name was made public in the Swiss media, along with five others, by the Swiss authorities in connection to black money and the related ongoing tax probes in India. Sneh Lata Sawhney and Sangita Sawhney’s names have also been made public for the benefit of the Indian tax authorities.
The Swiss authorities are also discussing changes in law, the possibility of sharing information in cases being probed.
On the other hand, there are indications that maggi could soon be back. It just gained respite from the Bombay High Court on Maggi noodles,
The Bombay High Court has set aside the ban and directed Nestle to undertake fresh tests for Maggi in six weeks. The samples for fresh tests will be taken from the 750 cartons Nestle has preserved after discussions with the FSSAI. The company will be allowed to resume sales depending on the test results. Industry insiders believe this is the first step towards maggi’s revival in India.
Maggi, though, is in introspection mode. After being severely hit by the ban in India, Nestle is planning to re-launch maggi in a different avatar. Their sole dependence on maggi was beautiful while it lasted, but the lessons have been learnt by the food and beverage giant.
Does Nestle hold the Swiss Government responsible for using them in their quid-pro-quo deal with the Indian Government?