Nestle investigates reports of Russian import refusal

By Guy Montague-Jones

- Last updated on GMT

Related tags Nestlé Quality control

Nestle is investigating reports that the company has been denied permission to import baby food products into Russia from Finland.

According to newswire reports, the Russian Health Ministry watchdog Rospotrebnadzor had returned import application documents from Nestle citing “low production standards”.

Quality standards

Responding to these reports, Nestle told “Nestle is not in a position to comment on rumours stating that Rospotrebnadzor allegedly refused to register Nestle baby food products to be imported from Finland.

"As a matter of fact, Nestle Russia did not get any official notification from Rospotrebnadzor or any other controlling body in Russia. Nestle Russia is in contact with Rospotrebnadzor representatives to clarify the situation."

Nestle sought to reassure consumers and partners of the safety and quality of its products.

"All Nestlé products sold in Russia are absolutely safe for consumption. The company applies strict quality control measures at all levels of its raw material sourcing and manufacturing process. The same stringent quality control systems are in place in all Nestle factories worldwide."

Russia is a key market for Nestle with annual sales totaling more than $2bn but the country has not been an unambiguous success story. Over the past year especially, the global recession has hit Russian consumer spending.

In its financial results for the first quarter, published earlier this week, Nestle said more impulse-driven categories in Russia, such as chocolate, were still recovering”.

Financial success

But overall Nestle is celebrating a good start to 2010 after reporting 6.5 per cent quarterly organic growth, taking group sales to CHF 26.3bn.

Credit Suisse analyst Charles Mills told that the results were “up with the best expectations.”

Mills said that growth was good across the board, both in emerging and developed markets.

Bernstein Research analyst Andrew Wood also said the results came in stronger than expected, highlighting in particular the pricing recovery.

In a note to investors, Wood said: “The biggest positive surprise was the recovery in pricing which suggests, like Danone, that Q4 2009 was the nadir and that we should see strong, recovering pricing as 2010 develops.”

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