Nestlé Shareholders' Call for Healthier Options Amid Sugar Controversy Thwarted by EU Policy

Nestlé shareholders' push for healthier options amid sugar controversy faces obstacles due to EU policy. Despite calls for reform, regulatory constraints hinder swift changes. The clash highlights tensions between consumer demand for healthier products and regulatory frameworks governing food industry practices.

Shareholders have passed a resolution during the company's Annual General Meeting today (April 18) calling for an increase in the number of healthy foods amid a scandal involving high-sugar baby foods.

At Nestlé's Annual General Meeting in Lausanne, Switzerland, a group of company investors, including Legal and General Investment Management (LGIM), which collectively hold investments totaling $1.68 trillion in assets under management, supported a resolution calling for an increase in healthy food options. However, despite this significant backing, the resolution was rejected by the company, with 88% of the votes against it.

Simon Rawson, Deputy Chief Executive of ShareAction, the NGO that coordinated the resolution, expressed disappointment with the outcome but noted the clear shift in investor and consumer sentiment towards addressing the business risks and public health impacts associated with industries heavily reliant on the sales of unhealthy food. He emphasized that while the achieved vote may have fallen short of expectations, the momentum for change is unmistakable.

Simon Rawson emphasized that if the issues prompting the resolution are left unaddressed, public health trends will only deteriorate further. Despite Nestlé's announcement of new health targets last year, which included a pledge to increase sales of more nutritious products by 50% by 2030, shareholders argue that these targets are not ambitious enough.

The resolution called for the establishment of an internationally recognized target to significantly reduce the global sales of unhealthy foods. While Nestlé's webpage asserts a commitment to enhancing quality of life and promoting a healthier future, critics argue that the company's actions do not align with this mission.

In a press release, Howarth explained that, contrary to Nestlé's claims, three-quarters of its global sales consist of unhealthy products containing high levels of salt, sugar, and fats. This misalignment between Nestlé's stated purpose and its product offerings underscores the need for more substantive action to address public health concerns.

The investors' call for increased scrutiny on Nestlé's product offerings coincides with a scandal involving high-sugar baby food sold by the company in low- and middle-income countries, as revealed in an investigation by Public Eye and the International Baby Food Action Network (IBFAN).

Nestlé, which commands a significant share of the global baby food market, controlling approximately 20%, translates to nearly $70 billion (€656 billion). In 2022 alone, Nestlé's baby food brands in low- and middle-income countries generated over $2.5 billion (€2.3 billion) in revenue, according to Euromonitor.

The investigation uncovered that despite being marketed as healthy and essential for supporting young children's development, Nestlé's baby food brands contain high levels of added sugar. Of particular concern is the discrepancy in sugar content between products sold in different countries. The investigation concluded that "for Nestlé, not all babies are equal when it comes to added sugar."

For instance, Nestlé promotes its biscuit-flavored cereals for babies aged six months and above in Switzerland with the claim of "no added sugar." However, in countries like Senegal and South Africa, cereals with the same flavor contain a substantial 6 grams of added sugar per serving.

The investigation analyzed 115 products sold by Nestlé in its primary markets across Africa, Asia, and Latin America, revealing that at least 94% of them contained added sugar. Researchers were able to determine the exact amount of added sugar in 67 of these products, which averaged almost 4 grams per serving, approximately equivalent to one sugar cube.

Among these products, the highest amount of added sugar—7.3 grams per serving—was found in a product intended for six-month-old babies in the Philippines. ShareAction issued a warning in their press release, cautioning that Nestlé's current business model heavily relies on the sales of unhealthy food, and emphasized that there are significant human costs associated with failing to adapt this model.

The World Health Organization (WHO) recommends avoiding the consumption of sugar-sweetened drinks and foods with added sugar during the first year of life. Furthermore, WHO advises that added sugar should be prohibited in all baby foods, and the total sugar intake should be limited to 15% of energy intake.

This article has been updated to reflect the results of the vote.

Source: euronews‍