Nestlé Plans Price Increases to Offset Middle East Supply Costs

Nestlé CEO Philipp Navratil said instability in the Middle East is raising suppliers’ energy, freight and raw-material costs, creating a margin headwind even though the region accounts for only about 2% to 3% of the company’s sales. The company plans to manage the pressure through selective price increases, product reformulation, efficiency savings and cuts to weaker products that consumers may not accept at higher prices. Nestlé is also reviewing its portfolio, including divestments from some businesses, while remaining open to strategically important acquisitions. Lower coffee and cocoa costs and ongoing savings may partly offset the conflict-related pressures.