Global brands stretched by India's food safety record

Sun Jun 21, 2015 12:07pm EDT
 
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By Nivedita Bhattacharjee and Aditya Kalra

TALOJA, India/ MOGA, India (Reuters) - At a McDonald's (MCD.N: Quote) plant outside Mumbai, 200 workers walk through air dryers and disinfectant pools, then get to work making the day's 25,000 patties from chicken painstakingly sourced in a country with one of the world's worst food safety records.

To safeguard its multibillion-dollar brand, McDonald's says more than 100 checks it applies across its international operations are then carried out after that.

India's tainted water, patchy cold storage network and a retail sector made up of tiny local grocers present a major risk for international food brands, whose reputation can suffer globally from one local slip.

This can mean educating hundreds of small, often illiterate, farmers - critical in a fragmented farming sector that in some cases still uses "night soil", or human faeces, for composting.

"There are thousands of farmers you need to reach out to, each with maybe an acre, two acres of land," said Vikram Ogale, who looks after the supply chain and quality assurance for McDonald's India.

"Think of a situation where you have 1,000 farmers and ... you have to educate them, convince them."

But even that is sometimes not enough.

Swiss food group Nestle NESN.VX (NEST.NS: Quote) is currently battling India’s biggest food scare in a decade and an unprecedented branding crisis in the country, after regulators reported some packets of its noodles contained excess lead, a finding the company disputes.   Continued...

 
Security guards stand guard outside a corporate office of Nestle India Ltd. in New Delhi, India, June 8, 2015. REUTERS/Adnan Abidi