Nestle India shares drop as FSSAI launches legal action over baby formula

Shares in Nestle India fell sharply on September 18, 2026, after the Food Safety and Standards Authority of India launched formal legal proceedings against the consumer goods giant.

The enforcement action stems from a broad investigation conducted by the apex food safety regulator into infant food offerings and their digital marketing materials. According to reporting by Moneycontrol, the regulatory body examined promotional claims across multiple online retail channels. Business Today noted that the central food safety body zeroed in on promotional claims made on product labels and advertising materials, specifically targeting assertions around "5 HMOs" and "easy-to-digest whey" proteins in its baby food offerings.

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Nestle faces FSSAI crackdown over over baby food formula claims, shares take a hit  - BusinessToday

The scrutiny highlighted two specific product lines. In NAN Excella Pro Stage 1, promotional text highlighted "5 HMOs" and "Whey Protein". In Lactogen Pro 1, marketing material asserted that the inclusion of "Whey Protein" made the formula easy to digest. After seeking initial clarifications from the company, the regulator concluded that both offerings contravened Regulation 4(2) of the FSS (Foods for Infant Nutrition) Regulations, 2020. This statutory provision explicitly restricts promotional claims and materials designed to increase the marketability of infant foods.

Furthermore, Business Today noted that these marketing strategies breached Section 3 of the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992.

Alongside the promotional violations, laboratory testing uncovered chemical non-compliance in the company's manufacturing pipeline. A routine sample of a follow-up formula manufactured by Nestle India was found to contain sub-standard levels of Biotin during initial laboratory analysis. To verify the findings, the sample was forwarded to a designated referral laboratory for re-analysis. That secondary examination confirmed that the sample failed to conform to the prescribed Biotin requirements mandated under the 2020 regulations. Business Today added that the probe also flagged broader formulation parameters across select batches, including non-permitted levels of biotin that breached statutory standard limits, along with discrepancies in nutritional breakdown declarations.

In response to these combined infractions, the authority formally filed three separate adjudication cases against Nestle India Limited. The legal actions encompass the three flagged product lines: general Infant Nutrition, NAN Excella, and Lactogen.

"In NAN Excella Pro Stage 1, claims relating to "5 HMOs" and "Whey Protein" were observed, while in Lactogen Pro 1, a claim relating to "Whey Protein" being easy to digest was observed. Accordingly, clarifications were sought from M/s Nestlé India Limited regarding the above claims. Both products were found to be in contravention of Regulation 4(2) of the FSS (Foods for Infant Nutrition) Regulations, 2020, which restricts promotional claims/material intended to increase the saleability of infant foods, and Section 3 of the IMS Act, 1992, which prohibits their advertisement and promotion,"

FSSAI, regulatory body, via Moneycontrol

Financial markets reacted swiftly to the development. Equity values for the fast-moving consumer goods major experienced downward pressure as trading progressed on September 18, 2026. Moneycontrol reported that shares were trading lower at Rs 1.336 apiece, while Business Today noted that investors factored in potential brand erosion, legal liabilities, and heightened regulatory scrutiny across the firm’s core nutrition vertical.