Maggie Nestle India suffered Rs 12,080 crore loss
I just came across an article on ET where it was talking that how Govt. took actions without cross checking the issue with Maggie. Nestle is a very big brand and hence their business, in India alone their daily sell for maggie only (they have many other products) is about Rs. 185 crore. So alone from daily business, maggie is loosing many hundred crores of Rupees. The article says same made in India Maggie is regarded safe by Britain and Singapore like companies.
So, that is a issue, I am not going into details, nor I am saying it was wrong because I don't have lots information but I feel there should have been more probe into the issue before actually giving the punishment to the company.
So as per article :
Quote:
Let’s assume, as many analysts are, that Maggi will suffer four months of absence from shop shelves. That means a loss of Rs 740 crore in revenue. So, direct business loss for Nestlé is Rs 1,060 crore.
* Maggi suffered huge loss in brand value as government wrongly labelled it unsafe. Brand Finance, a globally respected brand valuation consultancy, had calculated in mid-June that government action had caused $200 million damage to the $2.4-billion Maggi brand.
Brand Finance’s calculations were based on financial and reputational losses suffered by Nestlé’s most prominent brand in India. And this figure doesn’t take into account brand loss suffered by Nestlé itself, so it’s a conservative estimate. $200 million, at current exchange rate, is aroundRs 1,270 crore.
* Nestlé India’s market cap loss from last week of May, when the controversy hit headlines, to closing price on July 6 is Rs 9,319 crore. Let’s take a round figure of Rs 9,300 crore.
* Many experts ET spoke to said Nestlé will have to spend around Rs 450 crore in marketing — more than double the marketing spend on Maggi before the controversy — to get the instant noodle product back on track.
Adding up loss figures under four heads gives us Rs 12,080 crore. Let’s round it up to Rs 12,000 crore. That’s the business loss from wrong and arbitrary government action on Maggi — and, therefore, that’s how much GoI should pay Nestlé
So if Nestle files a case and wins it then Government of India may have to pay them many 12000 crore rupees. We know know that this will never happen or could happen ?
You can read full article here at ET.
Do give your comment what to you feel about this issue...
