• Price Hikes on the Horizon for Nestlé Products
• Can Nestlé India Overcome These Challenges?
Unmesh Gujarathi
Sprouts News Exclusive
Nestlé India Ltd., one of the country’s leading food and beverage companies, has been slapped with a customs duty penalty of ₹69.45 lakh. The company disclosed this development in a regulatory filing on Wednesday, stating that the penalty was imposed under Section 28 (4) read with Section 28AA of the Customs Act, 1962.
The dispute arose after the Deputy Commissioner of Customs raised a customs duty demand against the company. Nestlé India had challenged the order, but the Appellate Authority upheld the decision in favor of the revenue authorities, confirming not only the customs duty liability of ₹69.45 lakh but also interest and an additional penalty of an equal amount.
Despite this financial liability, the company has reassured stakeholders that the ruling will have no material impact on its financials, operations, or other business activities. Nestlé India stated that it is currently exploring legal options to challenge the order through appropriate channels.
The announcement had no significant impact on the company’s stock price, as Nestlé India shares closed at ₹2,240.10 per share on the Bombay Stock Exchange (BSE) on Wednesday.
• SEBI Issues Insider Trading Warning to Nestlé India
In another regulatory setback, the Securities and Exchange Board of India (SEBI) recently issued an administrative warning letter to Nestlé India over an alleged violation of insider trading regulations by a senior company official.
Nestlé India did not disclose the identity of the individual involved but clarified that the matter was not expected to have any significant impact on its operations. According to a report by PTI, a Nestlé India spokesperson confirmed that the company takes compliance seriously and will take the necessary steps to prevent such incidents in the future.
The warning from SEBI comes at a time when corporate governance and transparency are under heightened scrutiny across industries, making regulatory compliance crucial for maintaining investor confidence.
• Nestlé India Considers Price Hikes Amid Rising Input Costs
As global commodity prices continue to surge, Nestlé India is considering modest price increases across its product range. The company is facing higher costs for key raw materials such as coffee, cocoa, and edible oil, which are essential for some of its most popular products, including Nescafé instant coffee and Maggi noodles.
Nestlé India’s Managing Director Suresh Narayanan confirmed that while price hikes are being considered, the company will keep them “as low as possible” to avoid impacting consumer demand.
The company’s cautious approach comes amid inflationary pressures and changing consumer spending patterns. Nestlé India remains focused on balancing cost management with affordability to sustain its market leadership.
With regulatory challenges and cost pressures mounting, the coming months will be crucial for Nestlé India as it navigates financial and operational hurdles while maintaining its strong foothold in the Indian market.
Nestlé India is facing a series of challenges, including a customs duty penalty, regulatory scrutiny from SEBI, and rising input costs. While the company remains optimistic about its financial stability and operational resilience, it must carefully navigate these issues to maintain investor confidence and consumer trust.
As developments unfold, all eyes will be on Nestlé India’s next steps—whether it will challenge the tax order, reinforce compliance measures, or manage price hikes without affecting affordability.
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• Nestlé’s History of Controversies
Nestlé, one of the world’s largest food and beverage companies, has faced numerous controversies over the years, ranging from ethical concerns to environmental and regulatory violations. One of the most infamous controversies is the baby formula scandal of the 1970s, when Nestlé was accused of aggressively marketing infant formula in developing countries, allegedly discouraging breastfeeding and leading to malnutrition among infants. The issue sparked international boycotts and widespread criticism, forcing the company to revise its marketing practices under pressure from organizations like the World Health Organization (WHO). Despite policy changes, Nestlé has continued to face scrutiny over its infant formula marketing tactics, with critics arguing that its influence in developing nations remains problematic.
Another major controversy involves water resource exploitation, particularly in drought-prone regions. Nestlé has been accused of extracting excessive amounts of groundwater for its bottled water brands, often at the expense of local communities. In places like California, Michigan, and Pakistan, environmental activists and residents have protested against the company’s water extraction practices, arguing that Nestlé prioritizes profit over public access to clean water. Legal battles and investigations have been launched in several locations, with critics calling for stricter regulations on corporate water usage. Despite Nestlé’s claims of sustainable practices, many environmental groups remain unconvinced.
Nestlé has also come under fire for its role in deforestation and environmental degradation. The company has been linked to palm oil suppliers that destroy rainforests, particularly in Indonesia and Malaysia, endangering species like orangutans and contributing to climate change. Although Nestlé has committed to sustainable sourcing and zero deforestation policies, watchdog organizations argue that progress has been slow and inconsistencies remain. Reports from Greenpeace and other environmental groups have shown that Nestlé continues to rely on suppliers involved in deforestation, raising questions about its commitment to corporate responsibility.
In addition to ethical and environmental concerns, Nestlé has faced allegations of child labor and human rights violations in its supply chain. Reports from organizations such as Amnesty International and the Fair Labor Association have linked the company to cocoa farms in West Africa that employ child laborers under exploitative conditions. While Nestlé has pledged to eliminate child labor from its supply chain and invest in sustainable sourcing programs, independent audits suggest that the problem persists. These allegations have damaged Nestlé’s reputation, sparking legal action and consumer backlash, as ethical consumption becomes an increasingly important factor for global consumers.
The company has also faced backlash over its role in plastic pollution. As one of the world’s largest producers of packaged goods, Nestlé generates vast amounts of plastic waste, much of which ends up in oceans and landfills. Environmental activists have accused the company of failing to take adequate responsibility for its plastic footprint. In response, Nestlé has launched initiatives to reduce plastic usage, such as introducing recyclable packaging and pledging to make all its packaging recyclable or reusable by 2025. However, critics argue that these efforts fall short of addressing the scale of the problem, and Nestlé remains one of the top contributors to plastic waste globally.