Thursday, April 10, 2008

Changes at Nestle

As I wrote yesterday, Nestlé, the World's Largest Food Company, will have a new Chief Executive today. See:

There are other changes underway at Nestlé. Last year it bought Gerber baby foods from Novartis. This week it has sold a 25% stake in Alcon, producer of contact lens solutions, to Novartis for US$ 11 billion. It has options to sell the rest over the coming years. If the divestment from Nestlé is complete then one day Alcon may be removed from the boycott list of products from which Nestlé profits. Watch this space, as they say.

This extra cash is fuelling speculation that Nestlé will buy the Mead Johnson formula business from Bristol-Myers Squibb, which is putting it up for sale to concentrate on pharmaceuticals.

There are also suggestions that Nestlé may go for outright ownership of L'Oreal, which controversially took over Body Shop a couple of years ago. See:

In other Nestlé news today, the death of Rowntrees has been announced. Nestlé bought this British confectionery company based in York in a hostile takeover battle in the 1980s. Some production has since been moved outside the UK. Smarties moved to Germany. Black Magic to the Czech Republic. Dairy Box to Spain. 645 people were made redundant. (See the Daily Mail 20 September 2006). There has been investment in a new Aero factory in York, but with a quarter of the workforce on notice to leave, Nestlé tried to force through cuts of 30% to 40% in pay and conditions on those that remained, as the Amicus trade union website reported. See:

---extract begins
Tony Randerson, Amicus officer for Nestle Rowntree in York, said:

“Management have made clear that unless our remaining members accept significant cuts they face the same fate as their colleagues who have already lost their jobs.

“We are making clear to the company that although we will work with them to ensure the plant is viable and, if necessary, cost savings are made, eroding hard won and hard fought for pay and conditions and threatening employees with the sack is not an acceptable way to operate.”

The union says that threatening workers with the sack and imposing severe pay cuts is in breach of international employment guidelines and that they will be making representations to the company at an international meeting of all the trade unions involved with Nestle in Geneva next week (Tuesday 10th October).
---extract ends

As The Press reports today, Nestlé Rowntree is no more. It is being renamed Nestlé Confectionery, though some products will retain Rowntree branding.

This should serve as a reminder that Nestlé shows no loyalty to those that work for it, to the heritage of the businesses it swallows, or the communities where it operates. Tom Levitt MP, who is currently defending Nestlé's advertising and labelling of infant formula in South Africa (in breach of international standards and South African policies) because Nestlé bottles Buxton water in his constituency, would do well to remember this. See:

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