‘Nestle, get healthy food’

Nestle SA is facing a formal demand from some shareholders, including Legal & General Investment Management, to significantly improve the amount of healthy food the Swiss consumer group sells.

A coalition of investors, led by ShareAction, has filed a resolution asking the maker of Kit Kat chocolate to set targets to increase sales of healthier foods, at a time of surging ill health related to poor nutrition worldwide. It also wants Nestle to implement internationally accepted standards that define healthy food.

For the measure to pass at least 50% plus one vote of the registered share capital represented at the annual meeting in April would need to be cast in favour of the resolution.

Pressure is growing on food companies to make their range of products healthier, especially with obesity becoming a global health crisis in much of the developed world and on the rise in emerging markets. Unhealthy diets are a driving factor behind the global growth rates of obesity, increasing the risk of diabetes, heart disease, stroke and some cancers, according to the World Health Organisation. The health agency estimates that obesity will cost the global economy $4.3 trillion (about R80.7 trillion) a year by 2035.

The move by ShareAction comes six months after the responsible investing charity criticised the world’s biggest food maker for relying too “heavily on sales of less healthy foods” and not doing enough to drive sales of more nutritious products.

While there have been discussions with Nestle, they have reached “an impasse”, according to Maria Larsson Ortino, senior global ESG manager at LGIM.

“The company claims its products have ‘the power to enhance lives’, in reality three quarters of Nestle’s global sales are unhealthy products containing high levels of salt, sugar and fats,” said Catherine Howarth, CEO of ShareAction.