Nestle buoyed by price hikes

CHOCOLATE and sweets maker Nestle hiked the price of its products during the first quarter of this year to help keep the group on track for its full-year targets.

The Swiss-based company, whose brands include KitKat and Polo, said it increased prices by 2% across its range of products to compensate for higher raw materials costs. Overall, Nestle said it increased sales organically by 4.6% in the quarter, with sales hitting £9.04bn.

Chairman and chief executive Peter Brabeck-Letmathe said: 'Whilst the first quarter, as expected, still showed some upward pressure in raw material prices, we were able to compensate this through price increases.' He described the start to the year as 'solid', helping it to maintain a full year organic growth target of 5%-6%.

Nestle's products range from instant coffee, evaporated milk and Ski yoghurt to Rolo, KitKat and Polo sweets, Vittel mineral water and Buitoni pasta. The group is based in Vevey in western Switzerland and has a UK head office in Croydon, Surrey, and factories across the country.

It said in October last year that poor weather and rising prices in Europe had contributed to flat profits in the first nine months against a year earlier. Rivals such as Unilever have experienced similar conditions.

Nestle said its drinks business had a good start to the year, with 4.7% organic growth helped by strong performances in instant coffee and ready-to-drink beverages. Sales of milk, nutritional and ice cream products rose 4.1% while chocolate and confectionery had organic growth of 1.9%, held back by a weak performance in sugar confectionery and distribution issues in Russia.

The group's pet care division saw organic growth of 6.4%, mainly driven by US sales.