Shares of Nestle have plummeted to their lowest level in eight years following a scandal involving the detection of harmful bacteria in several batches of infant formula.
Operative Information Center-OMM reports, citing foreign media, that the company's market value has seen a significant downturn as a result of the safety concerns.
Compared to the peak performance recorded in 2022, the value of the company's shares has decreased by 38%. In contrast, Nestle's primary competitors, Danone and Unilever, have seen their share prices increase by 32% and 28%, respectively, during the same period.
The scandal has further exacerbated the company's situation amid a steady decline in sales and rising production costs. Negative performance indicators have been specifically noted for products manufactured under the Purina, Nespresso, and KitKat brands.
Earlier, Nestle announced a recall of several batches of baby food brands, including SMA, BEBA, and NAN, across 25 countries. The recall was initiated due to the potential presence of harmful bacteria and toxins that can cause nausea and vomiting. Despite the widespread recall, Nestle stated that no cases of infection or symptoms related to the affected products have been officially confirmed yet.
Nestle, a Swiss multinational food and drink processing conglomerate, is currently facing one of its most significant corporate crises in nearly a decade. As the world's largest publicly held food company, such safety recalls often have far-reaching implications for consumer trust and global supply chains. Financial analysts suggest that the company will need to implement rigorous quality control overhauls to stabilize its market position and regain investor confidence in the highly sensitive infant nutrition sector.
