Nestlé fights off shareholder proposal to reduce “unhealthy” food products

19 Apr 2024 --- Nestlé has resisted investor proposals to reduce levels of fat, salt and sugar in products. During yesterday’s AGM, only 11% of shareholders backed a proposal which called for the F&B giant to cut back on “unhealthy” offerings across its portfolio, insisting that it does in fact provide a diverse range of healthier F&B.

The majority (88%) of shareholders voted against the resolution — which was led by NGO ShareAction — while only 11% favored it and 1% abstained from voting.

The AGM was attended by 1,107 shareholders, representing close to 55% of the capital and close to 80% of the shares entitled to vote, with an independent representative acting on behalf of the 99% percent of shares represented.

“A small group of shareholders led by the NGO ShareAction wants us to disengage from indulgent products. This is wrong. It will restrict Nestlé’s strategic freedom and limit management’s ability to make decisions or responsible decisions. The shareholders’ proposal is not in our best interest, not for our consumers and not for you,” states Paul Bulcke, Nestlé chairman and former CEO.

The resolution was filed last month by a coalition of shareholders holding US$1.68 trillion of Nestlé assets, expressing fears of reputational risks. The company has rejected the resolution’s claims that three-quarters of its sales come from “unhealthy products.”

What lies ahead
ShareAction is disappointed with the result of yesterday’s vote. The organization describes the vote as “less than we wanted,” while also arguing: “Investors and consumers are recognizing the importance of addressing the business risks and public health impacts of an industry that is heavily reliant on the sales of unhealthy food.”

Holly Gabriel, registered nutritionist and consumer health lead at ShareAction, tells Food Ingredients First: “Left unaddressed, the public health trends that spurred this resolution will only get worse. This is why we expect investor support for resolutions like this at food companies to increase in the future.”

The shareholders coalition behind the health resolution argue that Nestlé should do more to meet the growing consumer demand for healthier food products and to face the increasing regulatory pressures from governments worldwide seeking to tackle the rising public health care costs associated with poor nutrition.

“We will continue to encourage shareholders to think about the public health impacts of their investments and to engage with global food and drink manufacturers,” says Gabriel. “They should heed the warning of this resolution and address the concerns of investors by taking urgent action to improve their impact on population health.”

“They have growing expectations not only from Nestlé but from all food manufacturers. We look forward to continued dialogue with Nestlé and hope to see progress toward the health goals the company has set itself,” she concludes.

Leadership and finances
At the AGM, shareholders also elected Geraldine Matchett to the Board of Directors. Matchett is the former co-CEO and CFO at dsm-firmenich. Henri de Castries did not seek re-election to the Board after 12 years of service due to the company’s internal term limit policy.

All but one other members of the Board of Directors were re-elected for a term until next year’s AGM.

Shareholders approved the annual review, financial statements, proposed dividend of CHF 3.00 ($US 3.30) per share and the capital reduction, representing an increase over the previous year.

Nestlé’s Creating Shared Value and Sustainability Report 2023, Compensation Report 2023 and the total compensation budgets of the Board of Directors and Executive Board have also been approved.

Today, the company further announced Guillaume Le Cunff, the current CEO of Nestlé’s Nespresso, as the new CEO of Zone Europe, starting on July 1 of this year.

By Milana Nikolova

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