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Shareholders challenge Nestlé to increase sales of healthy foods

A coalition of Nestlé shareholders, co-ordinated by responsible investment group ShareAction, has filed a resolution challenging the food giant to "dramatically improve" its sales of healthy food products. The shareholders are urging Nestlé to set a target to boost the proportion of its sales from healthier products amid concerns regarding regulatory, reputational and legal risks faced by the company, as well as the public health implications "associated with an over-reliance on less healthy foods". The investors have challenged Nestlé to implement internationally accepted standards for defining healthy food, rather than straying from credible guidelines. Investors with $1.68 trillion in assets under management – including Legal and General Investment Management (LGIM), Candriam and La Francaise Asset Management – are supporting the resolution, which will be voted on at Nestlé’s Annual General Meeting on 18 April. Catherine Howarth, chief executive at ShareAction, said: “Nestlé is the biggest food company in the world and has an enormous influence on billions of people’s diets and lives through the products it makes, advertises and sells to us". She added: "As Nestlé has consistently failed to set out how it will shift the balance of its sales towards healthier food options, concerned investors have been left with no option but to bring forward a resolution at the company’s AGM in April. Any move away from sales of unhealthy products by Nestlé will inevitably support healthier communities all over the world and in the long-term help economies too." In a media release announcing the filing, Howarth said that three-quarters of Nestlé's global sales are of "unhealthy products containing high levels of salt, sugar and fats". Nestlé disputed this when approached by FoodBev for comment. A spokesperson for Nestlé told FoodBev: "We appreciate the constructive dialogue with ShareAction and the investor coalition over recent years, but we will have to agree to disagree here. ShareAction is targeting the wrong company. We are already moving and more would be accomplished by asking other firms to level up." "Nestlé was the first food and beverage company to provide transparency on the nutritional value of its entire portfolio against a government-endorsed nutrient profiling model. This demonstrated that we offer a diverse range of products that is not reliant on indulgent or less nutritious options. The assertion that three-quarters of our sales come from unhealthy products is wrong: in the first year of our reporting, nutritious and specialised nutrition products have gone from 57% to 59% of total sales (minus pet care). Or looking at it another way, 50% of our sales now come from coffee, pet care and Nestlé Health Science products, up from 30% a decade ago. We also disagree that products such as plain coffee or vitamins, minerals and supplements should be excluded. These are part of our portfolio and consumed by people on a daily basis." Last year, Nestlé published its sustainability 2023 report, where it sets a 2030 target to increase the sales of more nutritious products. However, ShareAction accused the Swiss multinational company of having a "flawed approach". Maria Larsson Ortino, senior global ESG manager at LGIM, commented: “Following Nestlé’s health target announced last year, we publicly noted that we were disappointed that the company had not taken the opportunity to set a specific, measurable and proportional target to increase sales from products that meet healthy thresholds". “Since the publication of the target, we have had additional engagements with Nestlé but consider the dialogue to have come to an impasse. We therefore deemed the next appropriate step to be to co-file this shareholder proposal. We want to press home to the company, and to the food and beverage sector as a whole, the importance we place on nutrition.” Nestlé said that while it acknowledges ShareAction's perspective, the company disagrees with the idea of restricting growth in specific areas of its portfolio. It argued that implementing a proportional target would require weakening valuable segments of its portfolio, potentially benefiting competitors without contributing to public health objectives.

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