CCI junks complaint against Nestle alleging use of dirty water to make Maggi sauce

The Competition Commission of India (CCI) on Tuesday dismissed a complaint which alleged that Nestle India's factory in Goa's Bicholim was using dirty water for the production of Maggi Sauce [Sarvesh M. Kolumbkar Vs Nestle India Limited].

The CCI held that the allegations primarily pertained to violations of food and safety standards and did not disclose any competition law concerns.

“There is no competition issue arising out of the present case and thus, the matter is closed forthwith under the provisions of Section 26(2) of the Act,” the Commission stated.

The case was initiated on a complaint filed by one Sarvesh M Kolumbkar, who accused Nestle India’s Goa facility of using a “dirty water extraction pump from an under-construction site” in the manufacturing process of Maggi Sauce.

He further alleged that false labels were being affixed to bottles, thereby deceiving consumers and denying them clean and hygienic food.

Kolumbkar argued that such practices not only breached the Food Safety and Standards Act, 2006 but also amounted to abuse of dominance under Section 4 of the Competition Act, 2002.

He sought interim relief under Section 33, including investigation of what he described as a “Maggi Sauce scam” allegedly ongoing for 15 years, and requested that certification bodies be barred from granting approvals.

However, CCI observed that the complaint revolved around food safety violations rather than competition concerns. Section 4 of the Competition Act prohibits enterprises from abusing their dominant position, including imposing unfair conditions, limiting production or denying market access. CCI held that the allegations of unhygienic production and mislabelling did not demonstrate anti-competitive conduct within the meaning of the Act.

Consequently, the Commission declined to order an investigation and also rejected the request for interim relief after noting that “no case for grant of interim reliefs as sought under Section 33 of the Act arises”

With this finding, the complaint was dismissed under Section 26(2) of the Competition Act, which empowers CCI to close cases at the prima facie stage if no competition issue is made out.

The interlocutory application filed by the Informant was also disposed of.

[Read Judgment]