Nestlé India Sees Worst Fall In 3 Years, Shares Slump 5.4% Amid Allegations Of Sugar Addition To Baby Foods

Sugar Controversy: Nestlé India faced a big blow in the stock market as its shares plummeted by up to 5.4 per cent following allegations of adding sugar to baby food products sold in India and several other countries, excluding Europe and the UK. The accusations, brought to light by Swiss investigative organisation "Public Eye," raised concerns about the nutritional content of Nestlé’s popular baby food brands.

Stock price

Shares of Nestlé India touched a day's low at Rs 2,409.55 on the BSE, as this is the worst single-day drop in the past 3 years. This steep decline comes in the wake of reports suggesting that the multinational FMCG giant has been incorporating sugar into its baby food products sold in various countries, excluding Europe and the UK.

Nestlé India recouped some of intra-day losses as its shares closed at Rs 2,462.75 down 3.31 per cent on the BSE on Thursday.

What does the report say 

The report, published by "Public Eye," revealed that Nestlé’s Cerelac baby cereals contained supplementary sugar, averaging nearly 3 grams per portion, in India. Interestingly, Cerelac wheat-based cereals marketed in Germany, France, and the UK were found to be free from additional sugar. However, similar products sold in Ethiopia contained over 5 grams per serving, while those in Thailand had as much as 6 grams. This finding, disclosed by Public Eye, underscored the disparity between Nestle's product formulations in low and middle-income countries compared to international guidelines aimed at curbing obesity and chronic diseases.

Both "Public Eye" and the International Baby Food Action Network (IBFAN) arrived at these conclusions after analysing samples of Nestlé’s baby food items from Asia, Africa, and Latin America.

Nestlé's response

Nestlé India responded to the allegations, highlighting its commitment to maintaining the nutritional quality of its infant cereal products. A company spokesperson stated that Nestle adheres to CODEX standards and local specifications, ensuring compliance with nutrient requirements, including added sugars. The spokesperson further highlighted Nestlé’s efforts in reducing added sugars by up to 30 per cent over the past five years without compromising nutrition, quality, safety, or taste.

“Compliance is an essential characteristic of Nestlé India and we will never compromise on that. We also ensure that our products manufactured in India are in full and strict compliance with CODEX standards (a commission established by WHO and FAO) and local specifications (as required) pertaining to the requirements all nutrients including added sugars. Reduction of added sugars is a priority for Nestlé India. Over the past 5 years, we have already reduced added sugars by up to 30%, depending on the variant. We regularly review our portfolio and continue to innovate and reformulate our products to further reduce the level of added sugars, without compromising on nutrition, quality, safety, and taste. Nestlé India is committed to delivering the best nutrition to our consumers, which we have been doing for  over 100 years and would always maintain highest standards of Nutrition, Quality and Safety in our products,” a company spokesperson said.

Following the report, added sugar in other countries was found as follows:

• Thailand - 6 grams
• Ethiopia - 5 grams
• South Africa - 4 grams
• Brazil - average 3 grams
• Indonesia - 2 grams
• Mexico - 1.7 grams
• Nigeria, Senegal - 1 gram

In India alone, where Cerelac sales exceeded $250 million in 2022, all Cerelac baby cereals were found to contain added sugar, averaging nearly 3 grams per serving, according to the study.