kit kat

Nestlé has claimed shareholders are “targeting the wrong company” after being accused of relying on HFSS products to drive three-quarters of its sales.

A coalition of shareholders, co-ordinated by ShareAction, today filed a resolution to its AGM next month, challenging Nestlé to “dramatically improve its impact on people’s health”.

The coalition wants the food giant to set a target to increase the proportion of its sales from healthier products.

It claims the backing of investors with $1.68 trillion in assets under management, including Legal & General Investment Management, and La Française Asset Management.

Last September Nestlé, which sells products including Kit Kat, Shreddies and Yorkie, published a new target to sell ‘more nutritious’ products by 2030. However, ShareAction says it falls far short of investor expectations for the company in improving public health.

“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,” said ShareAction CEO Catherine Howarth.

“While the company claims in its mission statement that its products have ‘the power to enhance lives’, in reality three-quarters of Nestlé’s global sales are unhealthy products containing high levels of salt, sugar and fats.

“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.”

ShareAction’s Healthy Markets coalition has been in dialogue with Nestlé and a raft of other large food manufacturers and is also backing Nesta’s proposals for the government to introduce mandatory heath targets for the UK’s leading food retailers.

Maria Larsson Ortino, senior global ESG manager at Legal & General Investment Management, said: “As a long-term investor, LGIM believes that healthcare costs and decreased productivity have significant negative consequences on our clients’ assets across multiple sectors.

“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.”

However, Nestlé said it was making major strides in making its portfolio healthier and said the move was counterproductive.

“We appreciate the constructive dialogue with ShareAction and the investor coalition over recent years, so this resolution is disappointing and counterproductive,” said a Nestlé spokeswoman.

“ShareAction are 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. We have made progress already in year one of our reporting, with more nutritious and specialised nutrition products going from 57% to 59% of global sales. Looking at it another way, 50% of our sales now come from coffee, petcare and Nestlé Health Science products, up from 30% a decade ago. The numbers are going in the right direction.”

Nestlé claimed a proportional target would sabotage its “value creation model”.

“It would require us to weaken valuable parts of our portfolio, creating opportunities for competitors without yielding public health benefits,” said the spokeswoman.

“We take our role in the food sector seriously and have been working for decades to adjust our portfolio, reformulate our products, provide transparency, guide consumers towards balanced consumption and strengthen our responsible marketing practices.

“Our goal is to achieve success across all segments of our portfolio, ensuring that we address responsibly the diverse needs and preferences of our consumers.”