Shareholders called to increase the number of healthy foods in a resolution voted today (18 April) in the company's Annual General Meeting amid a scandal on high sugar baby foods.
ADVERTISEMENTA group of company investors, that includes Legal and General Investment Management (LGIM), with investments amounting to a total of 1.68 trillion dollars in assets (under management) supported the resolution voted on at Nestlé's Annual General Meeting in Lausanne, Switzerland.
With 88% of the votes against, the company rejected the shareholders petition to "reduce its reliance on sales of less healthy products".
“While the vote we achieved today may be less than we wanted, the direction of travel is clear. Investors and consumers are recognising the importance of addressing the business risks and public health impacts of an industry that is heavily reliant on the sales of unhealthy food," Simon Rawson, Deputy Chief Executive of ShareAction, the NGO that coordinated the resolution, said after the vote.
He added that left unaddressed, the public health trends that spurred this resolution will only worsen.
Last year, Nestlé announced new health targets, pledging to increase sales of more nutritious products by 2030 by 50%, which, according to the shareholders is not ambitious enough.
The resolution called for an internationally recognised target to be set to significantly reduce the sales of unhealthy foods worldwide.
Nestlé's webpage reads that "driven by our company purpose – enhancing the quality of life and contributing to a healthier future – we are focusing our efforts on ensuring that our product brands enable healthier lives".
Howarth explained in a press release that, despite the company's claims, three-quarters of its global sales are unhealthy products that contain high levels of salt, sugar and fats.
The investors' call comes amid a scandal on high sugar baby food sold by Nestlé in low- and middle-income countries revealed in an investigation by Public Eye and the International Baby Food Action Network (IBFAN).
The company controls 20% of the world's baby food market which amounts to nearly $70 billion (€656 billion). In low- and middle-income countries, Nestlé’s baby food brands Nido and Cerelac made more than $2.5 billion (€2.3 billion) in 2022, according to Euromonitor.
The investigation shows that these baby food brands promoted as healthy and "key to supporting young children’s development" contain high levels of added sugar.
However, the most worrying part is the difference in the amount of sugar in the products depending on the country as the investigation concludes that "for Nestlé, not all babies are equal when it comes to added sugar".
The research shows that, in Switzerland, Nestlé promotes its biscuit-flavoured cereals for babies aged from six months with the claim "no added sugar", while in Senegal and South Africa, cereals with the same flavour contain 6 grams of added sugar per serving.
They analysed 115 products sold by Nestlé in its main markets in Africa, Asia and Latin America and found that at least 94% of them contained added sugar. Researchers determined the exact amount of added sugar for 67 of these products, which, on average, was almost 4 grams per serving, around one sugar cube.
They found the highest amount - 7.3 grams per serving - in a product for six-month-old babies in the Philippines.
ShareAction warned in their press release that Nestlé's present business model relies too heavily on unhealthy food sales and that "there is a human cost to failing to adapt the current business model".
The World Health Organisation (WHO) recommends avoiding the consumption of sugar-sweetened drinks and foods with added sugar in the first year of life.
WHO also advises that added sugar should be forbidden in all baby foods and states that total sugar should be limited to 15% of energy intake.
ADVERTISEMENTThis article has been updated to reflect the results of the vote.
