Nestlé faces a resolution at its AGM on Thursday that could force the world’s largest consumer goods company to cut back on high levels of salt, sugar and fats in its food and drinks.
The Swiss-headquartered multinational is urging investors to reject the proposal, arguing a move away from “indulgent products” could harm its “strategic freedom”.
Five institutional investors with $1.68tn (£1.35tn) in assets under management, including Legal and General Investment Management, have said they are concerned about the reputational risks to the company, as well as the public health impacts associated with an over-reliance on indulgent foods.
The shareholders – led by the campaign group ShareAction – pointed to research by Oxford University and the youth activist charity BiteBack. The non-governmental organisation (NGO) recently found that about 70% of Nestlé’s sales in the UK were of foods high in fat, salt and sugar.
The ShareAction chief executive, Catherine Howarth, said: “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.”
Nestlé, which is listed in Zürich and owns brands including KitKat and Yorkie chocolate bars and Quality Street sweets, said its own figures showed that 60% of sales, excluding PetCare, came from “more nutritious or specialised nutrition products”, while only 21% of its portfolio was focused on indulgent foods.
In video message to shareholders, its chair, Paul Bulcke, said Nestlé had always been committed to helping consumers make informed choices as part of a balanced diet. “Of course, this also includes enjoying moments of indulgence, if, or good chocolate for example, from time to time and in a responsible way,” he said.
“A small group of shareholders led by the NGO share action wants us to disengage from indulgent products. They even want us to include this in our articles of association.
“This is wrong. It will restrict Nestlé’s strategic freedom and limit management’s ability to make decisions or responsible decisions. The shareholders’ proposal is not in our best interest, not for our consumers, and not for you.”
In September, Nestlé put forward a nutrition target to sell “more nutritious” products by 2030. However, ShareAction said it fell far short of investor expectations.
ShareAction said the nutritious sales target was simply in line with Nestlé’s overall growth forecasts and made no commitment on the sale of unhealthy products, which could increase at a similar rate. As a result, it would not shift Nestlé’s reliance on sales of unhealthy products. The target also includes products such as coffee which have no nutritional value, it added.
Howarth 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.
“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.”
Nestlé will hold its AGM on Thursday, in Lausanne, Switzerland, at 2.30pm local time.