Price increases helped Nestlé achieve strong profit growth, but the Swiss FMCG giant was quick to deny accusations of “greedflation”. For the rest of the year, the food manufacturer expects more moderate price increases.
“Profits under pressure in Europe”
In the first half of 2023, Nestlé was able to raise its prices by an average of 9.5 %. The group saw sales rise 1.6 % to 46 billion Swiss francs (48 billion euros), while profits went up 7.7 % to 5.6 billion Swiss francs (6 billion euros). Volumes fell by 0.3 %, but still the company is optimistic and is raising its outlook for the full financial year.
Other food manufacturers such as Danone, Coca-Cola and Unilever have also reported strong profit figures this week, driven by price increases. CEO Mark Schneider, however, is not happy with accusations that brand manufacturers are raising prices more than necessary to optimise their margins. According to him, Nestlé has adjusted prices very moderately and conservatively: “Our profitability in southern Europe is significantly down. This is in spite of all the internal efficiency measures that we’re taking“, he explained to Reuters news agency.
Nestlé will continue to raise its prices at a more moderate pace later this year, he said. Increases will mainly target products for which input costs continue to rise.
