Shares of Nestle India on Thursday fell up to 5.4 per cent to the day’s low at Rs 2,409.55 on BSE. This comes after a report by Public Eye called out the FMCG major for adding sugar and honey to its best-selling infant milk and cereal products in developing countries like India but not in the European markets.
The finding raised concern about Nestle’s adherence to international guidelines aimed at curbing obesity and chronic diseases. Following the revelation, the health ministry was also said to be concerned about the issue.
Today’s fall in shares of Nestle, regarded as a long-term compounding machine, was the worst single-day drop in the last 3 years.
In a joint investigation, the Zurich-based watchdog and the International Baby Food Action Network (IBFAN) sent popular baby food samples in Asia, Latin America, and Africa from Nestle to a testing laboratory in Belgium. The study examined 150 products sold by the company in low and middle-income nations, including best-selling brands Cerelac and Nido.
The results of the testing found that “almost all” Cerelac wheat-based cereals by Nestle in those regions, targeted at infants from six months of age, contained added sugar equivalent to an average of 4 grams per serving, or a sugar cube.
The highest volume of sugar added to a product, at 7.3 grams per serving, was detected in the Philippines, followed by 6.8 grams in Nigeria and 5.9 grams in Senegal. Findings showed that in India, all 15 Cerelac baby products contain an average of nearly 3 grams of sugar per serving.
The same product is being sold with no added sugar in Germany and the UK, while in Ethiopia and Thailand, it contains nearly 6 grams, the study said.
Public Eye and IBFAN found that sugar was not added to equivalent products in Nestle’s home nation Switzerland and other major European markets in Germany, the UK and France. The report called this “a double standard that is unjustifiable and problematic” both from an ethnic and the public health standpoints.
It is worth noting that Nestle sold over Rs 20,000 crore worth of Cerelac products in India in 2022. Experts say that adding sugar, which is highly addictive, to baby products is a dangerous and unnecessary practice.
As the controversy erupted with health experts calling out the “double-standards”, Nestle said it has reduced sugar up to 30% in the past 5 years depending on variant in infant cereals.
“We regularly review and reformulate portfolio to further reduce levels of added sugar,” a company spokesperson said.
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