The global recall of baby formula by Nestlé could result in sales losses of up to 1.2 billion Swiss francs (€1.28 billion) for the company, while also posing a risk to its brand image. This issue emerges at a time when the new CEO, Philipp Navratil, is attempting to restore investor confidence in the Swiss food giant.
According to the Financial Times, on Monday Nestlé announced the withdrawal of specific batches of baby formula, including NAN, BEBA, Guigoz, SMA and Alfamino, due to potential contamination with cereulide, a toxin that can cause symptoms such as nausea and vomiting.
Nestle: Baby formula recalls span 46 countries
The recalls began in Europe and subsequently, during the week, expanded to Asia, Latin America, the Middle East and Africa, covering a total of 46 countries.
Jefferies analysts estimate that approximately 1.3% of Nestlé Group’s total sales could be affected, with the overall risk amounting to 1.2 billion Swiss francs.
A similar assessment was made by Warren Ackerman of Barclays, who placed the total risk in the range of 0.8% to 1.5% of the group’s sales. Since the beginning of the year, Nestlé’s stock has recorded a decline of 4.6%.
