THE DEBACLE AND REVIVAL OF NESTL INDIAS

MAGGI
ABSTRACT
This case study introduces students and participants to how relationships transpire between consumer
products and regulators responsible for oversight. It explores the detriments caused to product brands
by neglecting ethical responses to questions raised by government regulators and agencies and shows
why companies must have a considered ethical response to such crises. Nestl Maggi noodles had to
be withdrawn from the market and huge quantities of the product recalled and destroyed leading to
considerable losses for Nestl India. It also gave a toehold to new rival brand Patanjali, to launch its
product in the vacuum created in the market. The case study also shows how legal wrangles unfold in
India (a representative growing economy) with national ramifications even when they have their origins
in the remotest corners of the country

Pedagogical Objectives

To understand the profound effect that regulatory agencies can have on consumer brands in
developing countries

To discuss and understand the benefits if using ethically correct responses from both the viewpoints
of regulators and the consumer brand in responding to regulatory upheavals that can disrupt a
market-leading brand

To understand how the legal system works in cases of regulatory demands, how new entrants
exploit the opportunity and how brand ambassadors react when the reputation of a brand is
called into question

Case Positioning and Setting

This case study can be used in MBA, Executive MBA, and Management Development Programmes
for Business Ethics Courses as well as from the legal perspective in courses on Legal and Institutional
Dynamics. It can also be used in courses on Regulation in Public Policy courses to expound the effect
of regulatory activism.

Indian Institute of Technology Kharagpur