Business Day

Nestlé to review banking relationsh­ips

- John Revill

Nestlé will examine its banking relationsh­ips after the planned takeover of Credit Suisse by UBS, the food group’s CEO Mark Schneider said on Tuesday.

The world’s largest food and beverage company was a client of Credit Suisse, Schneider told broadcaste­r TeleZueri in an interview, and had been after the collapse of Switzerlan­d’s second-biggest bank. “We have worked closely with Credit Suisse for many decades in a spirit of trust,” Schneider told the broadcaste­r.

“You can see from such an example that Switzerlan­d as a business location and a financial centre are very closely linked. We now have to see how to reorganise our banking relationsh­ips, both with Swiss and internatio­nal providers.”

Schneider said the interventi­on by the Swiss government, the central bank and financial market regulator to engineer a merger with UBS had stabilised the situation and restored confidence.

Schneider said Nestlé had made a good start to 2023, though it was likely to implement price increases to offset inflation of raw material costs, he added.

The maker of Nescafe instant coffee and KitKat chocolate bars raised prices by 8.2% last year, but that did not fully offset the effect of increased ingredient costs on margins.

Price increases had so far only had a “very limited” effect on consumer spending, Schneider said. “As inflation continues, and then also affects our own profitabil­ity, we will have to adjust prices.

“We will continue to do this in a responsibl­e way, we don’t want to be a price driver. We respond to inflation, we don’t fuel it,” Schneider said.

The food maker is also working on savings to reach its goal for a full-year underlying trading operating profit margin of between 17% and 17.5%, said Schneider.

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