Nestlé’s Health Scandals Plague: Buitoni, Perrier, and More in Hot Water

“His strategy seems to be yielding initial results, even though the recovery remains fragile,” explains Jean-Philippe Bertschy, head of Swiss stocks at investment firm Vontobel. Another analyst notes that by relying on its “billionaire brands” (those generating more than 1 billion Swiss francs in global sales) such as Nescafé, Nespresso, KitKat, and Maggie, the Swiss group is not preparing for the future with new products and is reinforcing the prominence of its confectionery and chocolate bar brands, which are notorious for being unhealthy for consumers.

This issue does not just anger public authorities and NGOs like FoodWatch. At the general meeting of shareholders in 2024, a large group of investors, including the anti-junk food activist fund Legal & General Investment Management (LGIM), joined the company’s capital and voted on resolutions to compel it to provide healthy products. This British company estimates that Nestlé controls 20% of the global baby food market and incorporates a lot of sugar and salt in these products.

Laurent Freixe’s mission is not only to boost sales. He must also restore trust. With a succession of health scandals making headlines for nearly three years, a profound disillusionment has set in among customers, shareholders, public authorities, and even Nestlé employees. Moreover, the company’s tarnished reputation has weighed down its stock price, making it vulnerable to potential raids by predatory funds.

According to Yasmine Motarjemi, the former head of food safety at the group, Nestlé’s repeated negligence, which has sometimes resulted in casualties (always children), is not just bad luck. This whistleblower denounces a real system, corroborated by other former employees. “There was a drive to maximize profits by choosing the cheapest ingredient suppliers, who were sometimes the least scrupulous, while also increasing work pace,” laments a former unionist from Buitoni.

In fact, the investigation following the death of two children who had eaten a pizza contaminated with E. coli in 2022 had implicated a flour supplier chosen by Nestlé for its very low prices. It is too early to have certainties about the most recent case: the discovery, on April 22nd, of a toxic bacterium in baby food jars from the Nestlé brand, manufactured by the Vosges-based Sitpa plant, which the Swiss group is currently selling to the investment fund FnB. However, sources close to the case suggest that negligence in choosing low-cost ingredient suppliers was involved.

The hearings of the senatorial commission of inquiry into mineral waters, which have been ongoing for two months, have shown that trust will be very difficult to restore. “The attitude of Nestlé’s executives is disgraceful. Several of them lied under oath,” laments Senator Antoinette Guhl, an ecologist. “I personally asked the Nestlé representative if their mineral waters were polluted, and she swore under oath that the waters were pure. We later learned that she knew the waters were polluted.” Later, when Laurent Freixe was heard by the senators, he chose to abandon his executives: “I regret that we have not been able to convince you of our sincerity.”

When one of the investigators asked why his company had felt the need to conduct illegal filtrations if the waters were pure, Freixe, stammering, evaded the question: “This is a technician’s debate, I am not a technician, I am not in a position to answer.” A few days later, it was revealed that the company had to block 300,000 Perrier bottles because they were contaminated with fecal bacteria (E. coli, salmonella, campylobacter…) for nearly a month.

Already, in 2024, 3 million bottles had to be destroyed. At the bottling site in Vergèze (Gard), there is now concern that Perrier, a flagship brand of Nestlé and once again a sponsor of Roland-Garros this year, might lose its prefectural accreditation. An economic disaster looms.