Nestle warns consumers will pay more to offset inflation

Business

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Nestle chief executive Mark Schneider told reporters at the company’s full-year results that pre-tax profits fell 12.5 percent last year to £8.6billion due to higher costs. Its sales for the year rose 3.3 percent to £67.3billion. He said it would look to offset rising costs with further price increases. “It is a safe assumption that our input cost increases for 2022 will be higher than 2021. That is something that we have to reflect in our pricing.”

Nestle owns a diverse range of brands including Milkybar, Nescafe, Carnation, Purina pet foods and Haagen-Dazs.

Presenting its annual results yesterday, Reckitt said that it made a pre-tax loss of £260million for 2021 due to the inflationary pressures it was facing, compared with a profit of £1.9billion the year before.

Reckitt, which owns brands such as Dettol, Nurofen, Durex and Cillit Bang, said it faced “significant commodity inflationary pressures” this year and in the medium term.

It will offset them through “appropriate pricing” actions, as well as taking steps to boost its revenues and productivity.

Reckitt’s slide into the red came despite what it said were strong sales of its hygiene and health products due to the ongoing pandemic. Its revenues were down 5.4 percent to £13.2billion due in part to adverse currency movements affecting its overseas earnings.

Despite the uncertain economic environment and its full-year loss, Reckitt chief executive Laxman Narasimhan was so confident about the company’s prospects that he maintained the firm’s full-year dividend at 174.6p per share, a payout worth £1.25billion to shareholders.

He said: “We are targeting both growth in like-for-like net revenue and an increase in adjusted operating margin in 2022, despite an unprecedented inflationary environment and ongoing uncertainties created by Covid-19.”

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