CCI Dismisses Maggi Sauce ‘Dirty Water’ Complaint Case

CCI Dismisses Maggi Sauce ‘Dirty Water’ Complaint, Says Food Safety Issues Not Competition Law Violations

Commission rules allegations fall under FSSAI, not CCI; clarifies limits of its jurisdiction

Complaint alleged Nestlé used contaminated water and false labels; case closed under Section 26(2)

By Our Legal Reporter

New Delhi: October 09, 2025:

The Competition Commission of India (CCI) has dismissed a complaint against Nestlé India Limited, which alleged that the company used dirty water in the production of Maggi Sauce at its Bicholim, Goa factory. The case, filed by Sarvesh M. Kolumbkar, was closed under Section 26(2) of the Competition Act, 2002, after the Commission found no prima facie evidence of anti-competitive conduct.

The ruling is significant because it clarifies the jurisdictional boundaries between competition law and food safety regulation. While the allegations raised serious concerns about hygiene and consumer protection, the CCI held that such matters fall under the Food Safety and Standards Authority of India (FSSAI), not the competition regulator.

Background of the Case

The complaint, filed in 2025, alleged that Nestlé India:

Used contaminated water from an unapproved extraction source in the production of Maggi Sauce.
Affixed false and misleading labels suggesting the sauce was hygienically produced.
Violated provisions of the Food Safety and Standards Act, 2006.
Abused its dominant market position under Section 4 of the Competition Act, 2002.

The complainant described the issue as a “Maggi Sauce scam” allegedly ongoing for nearly 15 years and sought interim relief under Section 33, including a ban on certification bodies from granting approvals to Nestlé.

CCI’s Observations

After reviewing the complaint, the CCI concluded that the allegations did not raise any competition law concerns.

Scope of Section 4: The Commission explained that abuse of dominance under Section 4 typically involves:
- Imposing unfair or discriminatory conditions or prices.
- Limiting production or technical development.
- Denying market access to competitors.
No Competition Issue: The alleged use of dirty water, mislabelling, and violation of food safety norms did not amount to any of these practices. There was no evidence that Nestlé’s conduct restricted competition, harmed rivals, or exploited consumers in a way that distorted market dynamics.
Jurisdictional Limits: The CCI emphasized that issues of food safety, hygiene, and product labelling fall under the FSSAI, not the CCI.

Accordingly, the Commission dismissed the case under Section 26(2), which allows closure at the preliminary stage if no prima facie evidence of contravention is found. The request for interim relief under Section 33 was also rejected.

Legal Context

The case highlights the boundaries of competition law in India.

Competition Act, 2002: Designed to prevent anti-competitive practices, abuse of dominance, and cartels. Its focus is on ensuring fair markets and protecting consumer welfare through competition.
Food Safety and Standards Act, 2006: Governs food safety, hygiene, and labelling. Enforcement lies with the FSSAI.

The CCI clarified that unethical or unsafe business practices do not automatically amount to abuse of dominance unless they directly impact competition.

Significance of the Order

This ruling is important for several reasons:

Clear Jurisdictional Boundaries
- The CCI reaffirmed that it is not a general consumer protection body. Its role is limited to competition issues.
- Matters of food safety must be addressed by the FSSAI.
Precedent for Future Cases
- The decision sets a precedent for distinguishing between regulatory violations and competition law violations.
- It prevents overlap and confusion between different regulators.
Consumer Awareness
- The case highlights the need for consumers to approach the right authority. Complaints about hygiene or contamination should go to the FSSAI, not the CCI.
Corporate Accountability
- While Nestlé was cleared of competition law violations, the allegations may still be examined by food safety regulators.

Reactions from Experts

Legal Analysts: Experts welcomed the ruling as a necessary clarification of the CCI’s jurisdiction. They noted that competition law should not be stretched to cover every consumer grievance.
Consumer Rights Groups: Some activists expressed disappointment, arguing that large corporations should be held accountable for misleading practices, regardless of jurisdiction.
Industry Observers: The decision reassures companies that the CCI will not intervene in matters outside its mandate but also underscores the importance of compliance with sectoral regulators like the FSSAI.

Broader Context: Maggi and Regulatory Scrutiny

This is not the first time Nestlé’s Maggi brand has faced regulatory challenges in India.

2015 Maggi Noodles Ban: The FSSAI banned Maggi noodles after tests allegedly found excess lead and MSG. The ban was later lifted after Nestlé challenged the findings in court.
Ongoing Scrutiny: As one of India’s most popular food brands, Maggi continues to face close monitoring from regulators and consumer groups.

The latest case shows that while Maggi remains under the spotlight, regulators are careful to respect their jurisdictional boundaries.

Lessons from the Case

For Consumers: Direct complaints about food safety to the FSSAI, not the CCI.
For Companies: Ensure compliance with both competition law and sectoral regulations. Misleading labels or unsafe practices may not violate competition law but can still attract penalties from other regulators.
For Regulators: Coordination between agencies like the CCI and FSSAI is essential to avoid gaps in enforcement.

Conclusion

The CCI’s dismissal of the Maggi Sauce “dirty water” complaint underscores the importance of jurisdictional clarity in India’s regulatory framework. By ruling that the allegations related to food safety and not competition law, the Commission reaffirmed its role as a market regulator, not a consumer grievance forum.

For Nestlé, the order brings relief from competition law scrutiny, though questions of food safety may still be pursued by the FSSAI. For consumers and regulators alike, the case is a reminder that different laws serve different purposes—and that effective enforcement depends on directing complaints to the right authority.

Ultimately, the decision strengthens the legal framework by ensuring that the Competition Act remains focused on preserving fair markets, while food safety regulators safeguard public health.