Recently enough, the very famous global brand Nestle has been under scanner for their 2-minute Maggi noodles due to the presence of excessive content of lead than the permissible limit and mislabeling with regard to monosodium glutamate (MSG) content on the packets. According to the Food Safety and Standards Rules, 2011, MSG, a "flavour enhancer," is harmful for human health, mainly for children. It is mandatory for companies to specify on the packaging if MSG has been added. The fire for the controversy ignited with the Indian state Uttar Pradesh Food Safety and Drug Administration Association detecting much higher levels of lead than the permitted levels apart from the presence of MSG in its packets.
This was followed by Gujarat, West Bengal, Maharashtra,
Uttarakhand, Odisha, Bihar, Assam, Punjab, Karnataka, Haryana, Goa,
Delhi, Tamil Nadu, Kerala and other Indian states sending samples
of Maggi for laboratory tests to determine safety for the popular
brand's noodles and thereafter banning of the same.
After a series of events, the Food and Drug Administration (FDA) in
Maharashtra and the Food Safety and Standards Authority of India
(FSSAI) issued orders banning all variants of Nestle India's
Maggi noodles, terming them as "unsafe and hazardous" for
human consumption. Upon approaching the Bombay High Court for
interpretation of the Food Safety and Standards Act 2011 and
seeking a judicial review of the orders passed by FDA and FSSAI,
Bombay HC rejected Nestle's plea for interim relief over the
ban on Maggi noodles.
What is more interesting is a Police Complaint filed against Bollywood stars Amitabh Bachchan, Madhuri Dixit and Preity Zinta, for endorsing the brand over the years (even when two among the three endorsed the brand years back!).
In our previous article "Celebrities' Accountability for Misleading Advertisements??" published in April, 2014, we had provided a detailed insight into how far and under what provisions of law the celebrities can be held accountable for the brands they endorse and the advertisements they feature in. Little did we know then, that we would be witnessing such an embroiling issue of Celebrity Endorsement so soon and on such a scaled level!!
The Indian provisions available with respect to holding Celebrities accountable for the endorsements include:
1. Filing a case in a consumer court for 'unfair trade
practice' which has been defined under section 2(1)(r) of The
Consumer Protection Act, 1986 and includes false claims made for
promoting sale of any goods.
2. Specifically in context of food items, Section 24 of Food Safety
and Standards Act (FSSA) states that any person who makes false
claims about the nutritional value of the product or the efficacy
of the product without providing any scientific justification
stands in violation of the Act. The FSSAI Act states that whosoever
is a party to a misleading advertisement or its publication can be
fined up to approx. 15,660 USD.
3. Besides these Acts, if an ad is released in India with false
claims, a person can write their complaint to Advertising Standards
Council of India (ASCI), a self-regulatory voluntary organization
of the advertising industry, and depending on whether the ad is in
alignment with the ASCI code and law of the land, the complaint is
reviewed and if upheld then the ad is voluntarily either withdrawn
or modified.
None of the above-mentioned provisions specifically hold the celebrities featuring in such ads making false claims, accountable for their acts. However, proposed amendments to the Consumer Protection Act has provisions to issue direction for discontinuation of such advertisements and even reporting such violations to police or any other law enforcing agency for criminal prosecution. One of the measures suggested in the proposed amendments is to hold actors accountable i.e. claim compensation for false claims in cases of false claims made in advertisements for products which they endorse.
However, a closer look at the real issue in the present controversy seems to revolve around allegations of a banned substance (MSG) and excess levels of lead being found in a product and NOT a case of misleading advertisement or the brand ambassadors' endorsements. The issue at hand is a purely manufacturing and production issue to be dealt by FSSAI with the manufacturers rather than shifting the blame game on the endorsers. What is to be noted here is that for any failures and transgressions in manufacturing norms, advertising and brand ambassadors are not the ones to be held responsible. The company and government officials who allowed those products to be sold are more liable than the celebrities, who merely lend their names to these products.
Thus, suing the stars for Maggi or any other product for that matter seems completely unjustified. A clear safety certificate by the government is a proof enough that a product is safe and the celebrities further cannot be held liable for endorsement of such a product. However, with the present controversy raising the issue, the advertising agencies and celebrities in the future will become more careful, putting in more effort in due diligence on the safety of the products they endorse. This could well impact the contours of endorsement contracts, which are likely to change, bringing in more due diligence as well as clauses to protect celebrities. All endorsement deals will now undergo more careful scrutiny. There would be no place for verbal or implied conditions, as is common today. Despite presence of 'indemnification' clauses in most major endorsement deals, they would now become watertight to the extent that the endorser could even demand an insurance to cover a crisis, should it occur. This might also lead to some sort of brand speed-dating, celebrities would embrace and discard brands frequently. The case seems to clearly showcase the perils of celebrity engagements in a digitally connected world.
THE AFTER EFFECTS
Despite the Celebrity liability being dragged into this issue, what
is more worrying for Nestle is the fact that they have been
battling its worst-ever branding crisis in India since this
controversy. In addition, what is being termed as the MAGGI EFFECT
is a phenomenon catching up as a result of Maggi Controversy where
buyers of popular brands like Parle, KFC, Wendy's & others
are turning into activists and are over cautious of the food they
buy. Brands such as ITC's Sunfeast Yippee, Nissin's Top
Ramen, HUL's Knorr and GSK Consumer's Foodies have also
witnessed sales dropping by more than three-fourths after the Maggi
controversy. The headlines such as "After Maggi, FSSAI to
test GSK, ITC fast food brands," "HUL's
Knorr Chinese noodles not in FSSAI approved list,"
"Customer finds earthworm in Wendy's burger"
and the like have become more apparent than ever before leading to
a mix of heightened concern about food safety and the prospect of
being able to benefit from the paranoia that's gripped
companies like Nestle and the others by claiming big damages from
big companies.
This Maggi effect has now spread its wings to the International market too with United Kingdom's food safety agency deciding to test a few samples of Maggi noodles stressing the same as a move of precaution. Also the Singapore authorities have ordered local importers to temporarily suspend the sale of Nestle's Maggi noodles imported from India. Besides this, precautionary tests have been conducted on Maggi and similar food products in Asian, East Asian Saarc nations and few European countries.
Underlying the "BIG MAGGI BAN" are the hidden positives of the launch of a robust, nationwide process of reassuring consumers and valued stakeholders of food safety. This controversy has also compelled other companies too to take corrective measures on their own. We believe that the FSSAI would now tighten the labelling, packaging and testing norms for the entire sector, which in turn is positive for the consumers.
What emerges from the "BIG MAGGI BAN" is the fact that companies today cannot overlook/compromise with the safety standards of the consumers. However, dragging others for the faults of manufacturers seems unjust on the part of media and consumers and the same should be taken care of in the future.
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