Maggi Ban: Wheat, spices suppliers facing Rs 15 crore loss every week

Suppliers of spices and flour to Nestle India are in the mid of nowhere ever since the instant Maggi noodles got banned from the Indian market. Following cancelled orders, unpaid bills and uncertainty over the future of business with Nestle India, suppliers are facing a loss of Rs 15 crore every week.

As per a report published in Economic Times, Paras Spices, a Punjab-based firm which has been working with Nestle since last three decades and supplies close to 200 tonnes of spices to Nestle every month, has retrenched around 300 temporary workers in its production unit. The firm that earns around 40% of its revenue from Nestle has shut the production lines catering to Nestle. "The ban has affected us both in terms of volumes and value," said Mahesh Pathak, Business Head, Paras Spices.

If reports are to be believed, about 70-80 flour mills across nation, which supplies nearly 1,800 tonnes of flour every day to Nestle's five plants, have also been hit hard.

“Nestle has not just cancelled its orders, but it has also asked the suppliers to take back their previous supplies because it doesn’t uses food items older than six days,” said VK Bansal, senior Vice-President at Roller Flour Millers' Federation of India. "The company officials are not available since the crisis began," Bansal informed.

Analysts expect Nestle to recover from the crisis in the long term and put Maggi noodles back on retail shelves. But they doubt if the Rs 2,000-crore brand will remain as popular as it has been because the product ban may impact consumer perception about its safety and health benefits.