Nestle steps up infant formula damage limitation with CEO video apology

Health warnings have been issued in 53 countries over Nestlé formula recalls

FILE PHOTO: The Nestle research centre at Vers-chez-les-Blanc in Lausanne, Switzerland, Aug 20, 2020. REUTERS/Denis Balibouse/File Photo

Nestle's CEO has issued a video apology for the recall of some batches of the company's infant nutrition products in dozens of countries as the Swiss consumer goods giant stepped up its damage-limitation measures.

The recall could threaten Nestle's strong position in China and other large markets for infant formula, thrusting CEO Philipp Navratil into crisis-management mode within a few months of being appointed to revitalise the multinational after a period of management turmoil.

At least 53 countries across Europe, the Americas, Asia and Africa have issued health warnings over infant formulas recalled by Nestle because of possible contamination with cereulide, a toxin that can cause nausea and vomiting.

Nestle shares, which have fallen by about 4% since the recall began in January, rose by 0.6 percent on Wednesday.

CEO APOLOGISES FOR 'WORRY AND DISRUPTION'

Navratil, who is seeking to revive growth through a portfolio review, apologised for the "worry and disruption" the recall caused for parents, caregivers and other customers.

In the video published late on Tuesday, he said there have been no confirmed cases of illness linked to the recalled batches of SMA, BEBA, NAN and Alfamino formula, which were potentially contaminated by a quality issue in an ingredient called arachidonic acid oil (ARA) from a leading supplier.

Nestle confirmed a quality concern at one of its factories in the Netherlands in December and began a precautionary recall across several European countries, Navratil said.

"We have suspended sourcing ARA oil from the supplier concerned," a Nestle spokesperson said, declining to name the supplier. "We have already restarted production using safe oil from another supplier."

Amsterdam-listed ARA producer dsm-firmenich said that none of its products had been affected by the Nestle recall. Chinese company Cabio Biotech, shares of which plunged almost 12 percent on Jan 8, did not respond to a request for comment.

Cabio had said in its 2024 annual report that it was developing its relationship with major clients such as Nestle and targeting international expansion.

RECALL COULD BE 'PRETTY DAMAGING' IN CHINA, ANALYSTS SAY

Highlighting the global nature of Nestle's supply chains, the recall quickly spread from Europe to large countries including Brazil, China and South Africa.

Nestle is one of the largest players in China's infant formula market, estimated at about 185 billion yuan ($26.5 billion) in 2025 by China-focused Daxue Consulting.

China's State Administration for Market Regulation last week urged Nestle to "fulfil its corporate responsibility", recall the relevant batches and safeguard consumers.

Barclays analysts on Wednesday noted the pressure from the Chinese authorities and said the issue could be "pretty damaging" for the company, especially in China, where mothers are particularly sensitive to this issue because of previous milk contamination cases involving various producers.