Nestle has rejected investor proposals that would force the world’s biggest consumer goods company, Nestle, to reduce high levels of sugar, salt and fats in their food and beverages.
At its annual meeting held on Thursday, 88% of shareholders voted in favor of the multinational with headquarters in Switzerland. Only 11% of shareholders voted against the resolution.
Nestle had asked investors to reject Nestle’s proposal. Nestle argued that a move away “indulgent” products could damage its “strategic independence”.
Legal & General Investment Management is one of five institutional investors who are concerned about the risks associated with the company’s reputation and the negative health effects that can be caused by an excessive reliance on food.
ShareAction, a campaign group led by shareholders, cited research from the University of Oxford as well as the youth activist charity BiteBack. The non-governmental organization recently discovered that around 70% of Nestle’s UK sales were made up of high fat, sugar and salt foods.
Simon Rawson is the deputy chief executive at ShareAction. He said, “While we may not have achieved the results we wanted today, our direction of travel remains clear.” Investors and consumers recognize the importance of addressing business risks and the public health impact of an industry heavily reliant upon the sale of unhealthy foods. “They have increasing expectations, not just from Nestle, but also from other food manufacturers.”
Nestle, listed in Zurich, owns KitKat, Yorkie and Quality Street chocolate bars, and its own figures show that 60% of its sales, excluding pet foods, come from “more nutritional or specialised nutrition products”, with only 21% of the portfolio devoted to indulgent food.
Paul Bulcke, Nestle’s chair, stated in a video message sent to shareholders that Nestle has always strived to help consumers make informed decisions as part of an overall balanced diet. He said that this included enjoying good chocolate from time-to-time and doing so responsibly.
ShareAction, a small group of shareholders headed by ShareAction, wants us to stop buying indulgent goods. This is not right. Nestle will be restricted in its strategic choices and the management’s decision-making abilities. “The shareholders’ proposal does not serve our interests, nor those of our customers, or you.”
Nestle announced a nutritional target in September to sell “more nutritious” products by 2030. ShareAction stated that it was far below investor expectations.
ShareAction stated that the nutritional sales target was in line with Nestle’s overall growth projections. They made no commitments on the sale unhealthy products which could also increase at the same rate. Nestle will not be able to shift its reliance on unhealthy product sales as a result. It added that the target includes coffee and other products with no nutritional value.