Nestlé is facing strike action across its UK plants this summer amid worker fury over its plans to freeze basic pay in 2010.
Unions argue the pay freeze is unfair as the Swiss food giant performed well in 2009 and proposes to up its shareholder dividend by 14.3%. Union members among Nestlé’s staff are now voting to decide if they want a strike ballot.
If members strike, production of brands including Kit Kat, Nescafé, Shredded Wheat and Buxton Water could be hit by action starting in June.
“If a company is struggling, we can understand a pay freeze,” said Unite national food and drink officer Jennie Formby. “This is not the case with Nestlé. They are doing spectacularly well. It’s extremely opportunistic at a time when they are proving recession-proof. They are making world-class profits. We don’t think it’s right they ignore the people making the profits for them.”
Almost 7,000 Nestlé staff work across 15 sites in the UK, with around 60% members of the GMB, Unite or Usdaw. The unions are working together to campaign for a 2.5% pay rise.
Tensions were also running high because of Nestlé’s plans to “attack” workers’ final salary pension scheme, said GMB national officer Allan Black. Nestlé is currently holding a 60-day consultation period about planned changes to the scheme, which Black claims will reduce its value by 30%.
However, a Nestlé spokesman defended the move. “The cost of many of our raw materials continues to rise and the pound remains weak against the euro and the dollar,” he said. “In this climate, it would be irresponsible to increase costs we control, including wages and salaries. We have improved the factory bonus scheme. Our terms and conditions are well above the industry average and are benchmarked every year.”
Nestlé turned over £65.8bn (CHF107.6bn) in 2009 a 1.9% increase in currency-adjusted terms. EBITDA increased 0.1% to £9.6bn but net profits fell by 42% to £6.4bn.