 "Image via Shutterstock")
The Maggi noodles episode and the subsequent ban has not only hit Nestle India hard, but also dented the revenues of flour mills in Uttar Pradesh.
The state roller flour millers supplying 'maida' to the various noodles manufacturing units have reported hit of over 10% following the ban on Maggi and subsequent depressed sale of noodles in general due to the fear psychosis amongst consumers.
Following the detection of lead content in Maggi noodles allegedly beyond the permissible limit, Food Safety and Standards Authority of India (FSSAI) had banned the popular instant noodles brand. Later, several states government had also followed suit and banned Maggi noodles.
"We have been hit hard by the Maggi noodles episode. The state flour mills' sales have taken hit of about 500 tonnes per day following the ban and suspension of manufacturing operations," UP Roller Flour Millers Association vice president Adi Narain Gupta told Business Standard over telephone from Ghaziabad.
In%age terms, he said, the loss varied from miller to miller, but it ranged from 10 to as high as 25%.
"The state millers supplied 'maida' to different noodles manufacturing units in Uttarakhand, Himachal Pradesh and Haryana," he said adding his own unit had witnessed the 'maida' sales dip by 5 tonnes per day.
Ram Ratan Agarwal of Bahraich-based A K Industries said the flour millers were doubly hit by the Maggi episode and the slump in the export market.
"The export market is down. Besides, our products (flour, maida) are not competitively priced due to the increase in the domestic wheat prices. Therefore, there are no avenues to hedge our current losses arising out of the noodles segment," he added.
There are about 250 big roller flour mills in UP with the combined annual capacity of over 5 million tonnes. However, most units operate at about 50% capacity.
Meanwhile, Association secretary R K Singh said the FSSAI had proposed tough regulatory norms for the flour millers, wherein their institutional customers would have to be compulsorily registered with the regulator.
To make the matters worse, the flour millers in UP have to bear higher taxation, which makes their products dearer by over 6% compared to other states, a Bijnore based flour miller informed on the condition of anonymity.
