NESTLE

Nestls four manufacturing facilities in the Philippines are: The Cagayan de Oro factory which manufactures Nescaf and Bear Brand. The Cabuyao factory which manufactures Nido, Nesvita, Nan, Nestogen, Bear Brand Choco, Nestl All Purpose Cream, Ready-to-Drink Milo, Bear Brand Sterilised and Chuckie The Lipa factory which produces Milo and Nestl Breakfast Cereals; and The Pulilan factory which manufactures Nestl Ice Cream and Chilled products Tanuan City- set to be completed in 2012

HISTORYtheOFhistory of the enterprise that NESTLE The key factor which drove early
would become the Nestl Company was Henri Nestl's search for a healthy, economical alternative to breastfeeding for mothers who could not feed their infants at the breast.

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In the mid-1860s Nestl, a trained pharmacist, began experimenting with various combinations of cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the problem of infant mortality due to malnutrition.

Nestl to continue expansion in PH

SOURCE: Philippine Daily Inquirer Consumer goods giant Nestl Philippines Inc. will be investing more in the country in the coming years, in a bid to offer new products to more markets, particularly consumers on the extreme top and bottom of the economic pyramid.

In an interview with the Inquirer on Thursday, Nestl Philippines chairman and chief executive John Martin Miller said the company, while already serving a wide spectrum of Filipino consumers, still had markets that were largely untapped. "Were looking for growth in many areas. Other business opportunities are being explored. Were serving most of the consumers in the middle, or the C and D classes, but theres a population on the top and bottom of the pyramid that we also hope to serve," he said. He said Swiss parent firm Nestl SA remained committed to the Philippines, particularly as the country was considered one of the firms key markets. "Were bullish about the Philippines. There are a lot of opportunities for growth. Were optimistic about our prospects," he said. "We want to raise the level of our investments in the Philippines. This has been fully endorsed by our shareholders." One particular focus would be the coffee sector, he said, from which Nestl Philippines was getting about a third of the raw materials for its second-biggest-selling brand, Nescafe. The bulk of its coffee supply came from Vietnam and Indonesia. Moving forward, he said the company hoped to source up to 70 percent of its coffee requirements from local farmers. "We want to breathe new life into the coffee-growing sector. During his recent visit here, (Nestl SA chief operating officer Paul Bulcke) stressed our commitment to providing employment in the countryside. We want to encourage people to go back to agriculture, especially coffee farming," he said.

He called the new product Farine Lactee Henri Nestl. Nestl's first customer was a premature infant who could tolerate neither his mother's milk nor any of the conventional substitutes, and had been given up for lost by local physicians. People quickly recognized the value of the new product, after Nestl's new formula saved the child's life and within a few years, Farine Lactee Nestl was being marketed in much of Europe.

Henri Nestl also showed early understanding of the power of branding. He had adopted his own coat of arms as a trademark; in his German dialect, Nestl means 'little nest'. One of his agents suggested that the nest could be exchanged for the white cross of the Swiss flag. His response was firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have a different trademark in every country; anyone can make use of a cross, but noone else may use my coat of arms."

Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles and George Page, broadened its product line in the mid-1870s to include cheese and infant formulas.The Nestl Company, which had been purchased from Henri Nestl by Jules Monnerat in 1874, responded by launching a condensed milk product of its own. The two companies remained fierce competitors until their merger in 1905.

Some other important firsts occurred during those years. In 1875 Vevey resident Daniel Peter figured out how to combine milk and cocoa powder to create milk chocolate. Peter, a friend and neighbor of Henri Nestl, started a company that quickly became the world's leading maker of chocolate and later merged with Nestl. In 1882 Swiss miller Julius Maggi created a food product utilizing legumes that was quick to prepare and easy to digest.

His instant pea and bean soups helped launch Maggi & Company. By the turn of the century, his company was producing not only powdered soups, but also bouillon cubes, and sauces and flavorings

 Nearly a hundred years after it first started operations in the country, Nestl Philippines, Inc. (NPI) today is a robust and stable organization, proud of its role in bringing the best food and beverage throughout the stages of the Filipino consumers lives. The Company employs more than 3,200 men and women all over the country. It is now among the top companies in the entire Nestl world, and is among the countrys Top 10 Corporations. Its products are No. 1 or strong No. 2 brands in their respective categories.

History-Nestle Phils. Inc.

Nestl Philippines, Inc., A Short History

The Early Years. Although Nestl products were already available in the Philippines as far back as 1895, it was not until 1911 when The Nestl and Anglo Swiss Condensed Milk Company was established in the country, with its first sales office in Calle Renta, Binondo. The Company was forced to suspend its operations during World War II, but soon made a comeback after Liberation, under a new name: Filipro, Inc. It continued to import products such as MILO, NIDO powder milk, MILKMAID and NESCAF from other countries. In the early 1950s, Filipro encountered difficulties when the Philippine government imposed import control. Due to lack of imported products to sell, it was forced to become a distributor of peanut butter, napkins, fruit preserves, and patis (fish sauce) just to keep its operations going.

A century of Nestls commitment to the Philippines is marked with centennial celebrations this year. Under the theme of Kasambuhay, Habambuhay Companion in Life, for Life Nestl Philippines presents Filipinos with a number of creative and interactive activities as part of the celebratory campaign. John Miller, CEO and Chairman for Nestl Philippines, explained that Nestls presence in the Philippines during the past 100 years has touched the lives of consumers, making an impact on Filipino families from generation to generation. He said: This relationship with the Filipino consumers, anchored on the quality of our brands and the role that these much loved brands have played in helping nurture and nourish Filipino families, is what led us to our centennial theme Kasambuhay, Habambuhay.

Local Production. In 1960, Nestl S.A.and San Miguel Corporation entered into a partnership resulting in the formation of Nutritional Products, Inc. (Nutripro). In 1962, Nutripros first factory started operations in Alabang, Muntinlupa to manufacture NESCAF. In 1977, Filipro, Inc. and Nutripro Inc. merged under the name Filipro, Inc. In 1986, Filipro, Inc. changed to its present name as Nestl Philippines, Inc. Nestle now has manufacturing facilities in Cabuyao (Laguna), Cagayan de Oro, Lipa (Batangas), and Pulilan (Bulacan) to meet the growing demand for Nestl products in the country. Soon to rise is another factory in Tanauan, Batangas.

Growth and Diversification. In 1991, Nestl pioneered the AIJV (ASEAN Industrial Joint Venture), a regional complementation program. The Company participated in this program with the production of breakfast cereals at the Nestl Lipa Factory, for export to ASEAN markets. Today, three of the Nestle factories in the Philippines Lipa, Cabuyao, and Cagayan de Oro -- serve as ASEAN Supply Centers to meet the requirements of Nestle markets in the region. In late 1998, Nestl Philippines became a wholly owned subsidiary of Nestl S.A., following the latters purchase of all of San Miguel Corporations equity shareholding in the Company. Driven by its mission to nurture generations of Filipino families, Nestl today produces and markets products under some of the countrys well known brands such as NESCAF, NIDO, MILO, NESTEA, MAGGI, BEAR BRAND, NESTL, and PURINA, among others. Its product range has expanded to include coffee, milk, beverages, non-dairy creamer, food, infant nutrition, ice cream and chilled dairy, breakfast cereals, confectionery, and pet-care. `

Key Dates 1866 Foundation of Anglo-Swiss Condensed Milk Co. 1867 Henry Nestl's Infant cereal developed 1905 Nestl and Anglo Swiss Condensed Milk Co. (new name after merger) 1929 Merger with Peter, Cailler, Kohler Chocolats Suisses S.A. 1934 Launch of Milo 1938 Launch of Nescaf 1947 Nestl Alimentana S.A. (new name after merger with Maggi) 1948 Launch of Nestea and Nesquik 1969 Vittel (initially equity interest only) 1971 Merger with Ursina-Franck 1973 Stouffer's (with Lean Cuisine) 1974 L'Oral (associate) 1977 Nestl S.A. (new company name) Alcon (2002: partial IPO; 2008: partial sale) 1981 Galderma (joint venture with L'Oral) 1985 Carnation (with Coffee-mate and Friskies) 1986 Creation of Nestl Nespresso S.A. 1988 Buitoni-Perugina, Rowntree (with KitKat) 1990 Cereal Partners Worldwide (joint venture with General Mills) 1991 Beverage Partners Worldwide (joint venture with Coca-Cola) 1992 Perrier (with Poland Spring) 1993 Creation of Nestl Sources Internationales (2002: Nestl Waters) 1997 Creation of Nutrition Strategic Business Division (2006: Nestl Nutrition) 1998 San Pellegrino and Spillers Petfoods Launch of Nestl Pure Life 2000 PowerBar 2001 Ralston Purina 2002 Schller and Chef America Dairy Partners Americas (joint venture with Fonterra) Laboratoires innov (joint venture with L'Oral) 2003 Mvenpick and Dreyer's 2005 Wagner, Protika and Musashi 2006 Creation of FoodServices Strategic Business Division (2009: Nestl Professional) Lactalis Nestl Produits Frais (associate) Jenny Craig, Uncle Tobys and Delta Ice Cream 2007 Novartis Medical Nutrition, Gerber and Henniez 2008 Ruzanna 2009 Vitality Beverage business 2010 Kraft Food's frozen pizza, Waggin'Train, Malher, Technocom and Vitaflo Creation of Nestl Health Science and Nestl Institute of Health Sciences

Our Brands

Most people know us through our brands. Our portfolio covers almost every food and beverage category giving consumers tastier and healthier products to enjoy at every eating occasion and throughout lifes stages including times of special nutritional need. Here is a sample of some of our brands. For more information, visit our Brands section. Baby foods Cerelac, Gerber, Gerber Graduates, NaturNes, Nestum Bottled water Nestl Pure Life, Perrier, Poland Spring, S.Pellegrino Cereals Chocapic, Cini Minis, Cookie Crisp, Estrelitas, Fitness, Nesquik Cereal Chocolate & confectionery Aero, Butterfinger, Cailler, Crunch, Kit Kat, Orion, Smarties, Wonka Coffee Nescaf, Nescaf 3 in 1, Nescaf Cappuccino, Nescaf Classic, Nescaf Decaff, Nescaf Dolce Gusto, Nescaf Gold, Nespresso Culinary, chilled and frozen food Buitoni, Herta, Hot Pockets, Lean Cuisine, Maggi, Stouffer's, Thomy Dairy Carnation, Coffee-Mate, La Laitire, Nido Drinks Juicy Juice, Milo, Nesquik, Nestea Food service Chef, Chef-Mate, Maggi, Milo, Minors, Nescaf, Nestea, Sjora, Lean Cuisine, Stouffer's Healthcare nutrition Boost, Nutren Junior, Peptamen, Resource Ice cream Dreyers, Extrme, Hagen-Dazs, Mvenpick, Nestl Ice Cream Petcare Alpo, Bakers Complete, Beneful, Cat Chow, Chef Michaels Canine Creations, Dog Chow, Fancy Feast, Felix, Friskies, Gourmet, Purina, Purina ONE, Pro Plan Sports nutrition PowerBar Weight management Jenny Cra

Key Figures

(a) Earnings Before Interest, Taxes, Restructuring and Impairments (b) Impacted by the disposal of 52% of Alcon outstanding capital (c) Operating cash flow less capital expenditure, disposal of tangible assets, purchase and disposal of intangible assets, movement with associates as well as with non-controlling interests. (a) Earnings Before Interest, Taxes, Restructuring and Impairments (b) Profit for the period attributable to shareholders of the parent from continuing operations before impairments, restructuring costs, results on disposals and significant one-off items. The tax impact from the adjusted items is also adjusted for. 2010 consolidated (In millions of CHF) Sales EBIT (a) Group as % of sales Net profit (b) as % of sales Capital expenditure as % of sales Equity attributable to shareholders of the parent Market capitalisation, end December Operating cash flow 109 722 16 194 14.8% 34 233 31.2% 4 576 4.2% 61 867 178 316 13 608

Free cash flow (c)

Net debt Ratio of the debt to equity (gearing) Per share data (CHF) Total earning per share (a) Equity attributable to shareholders of the parent Dividend as proposed by the Board of Directors of Nestl

7 761
3 854 6.2%

10.16 18.35 1.85

Our people
I would like to develop my career in Nestl, and it is encouraging to see that the management is committed to diversity, and particularly gender balance. I feel reassured that support programmes are in place and that I can get advice from my mentor. Kaori Murata, employee, Nestl Japan

"I believe high-performing organisations require environments where each employee can contribute with their own unique character, and where their abilities are fully developed and utilised. As the leader of the Women & Leadership Taskforce, I focus on ensuring an environment where women currently a minority group in Nestl in Japan can work with flexibility, a long-term perspective, and pride. Kaori Hanks, manager and leader of the Women & Leadership Taskforce, Nestl Japan

Context Thanks to the dedication and efforts of our employees, every day we make a difference to the lives of many consumers around the world. Nestl has a strong corporate culture which unites more than 281 000 people [KPI] working in more than 100 countries. Over a third (33.9%) of our workforce is located in Europe, 38% in the Americas and 28.1% in Asia, Oceania and Africa. During the global financial crisis, we have made every effort to focus on sustainability and stability, and ensure we have appropriate human resources for both our current and future needs. Our goals It is essential for Nestl competing in a rapidly changing world, to have a continuous learning and talent approach. Our employees need to be able to continue learning, and adapt their capabilities. Our future employees must also be active learners who are driven by, and live with change. By looking ahead to define people requirements and initiate effective learning in good time, Nestl can stay ahead, and differentiate ourselves from our competitors. In return we believe employees want jobs that are worthwhile and inspire them, so we strive to ensure each employee has the opportunities and support they need to fulfill their potential in a safe and fair workplace where they are listened to and valued, and where diversity and equality are respected. Our actions The continued drive for an engaged and diverse global workforce relies upon good development policies and people management, and the active support of line managers. Our resourcing, succession, and development opportunities at all levels of the business, are aligned with Nestls overall strategies. Nestl principles and continuous improvements in environmental and occupational health and safety management has also contributed to measures that increase employee engagement, their health and wellbeing, and reduce workplace accidents.

CSV summary: Value for Nestl: Skilled and motivated workforce; improved performance; superior business results; sustainable growth. Value for society: Employment opportunities; potential for a better standard of living; opportunities for selfdevelopment; higher workplace safety standards.

Our Vision

SETTING THE DIRECTION: Werner Bauer, Chief Technology Officer, Nestl S.A. Research and Development is a key competitive advantage for Nestl. Without our R&D Nestl could not have become the food industry leader in nutrition, health and wellness. With 29 research, development and technology facilities worldwide, Nestl has the largest R&D network of any food company. Nestls research, development and technology network, together with local market application groups, employs over 5,000 people. Nestl further strengthens its R&D capability through Innovation Partnerships at each stage of the product development process from early stage collaborations with start up and biotech companies to late stage partnerships with its key suppliers. By bringing together all of its global R&D resources, Nestl is able to provide high quality, safe food solutions for consumers worldwide whether this is in terms of nutrition, health, wellness, taste, texture or convenience. Above all, Nestl brings to consumers products that are of the highest quality. And safety is non-negotiable. R&D is also critical in ensuring regulatory compliance of all Nestl products. Nestl is able to launch new products quickly and efficiently, in countries all over the world, by integrating regulatory affairs in all its R&D activities, from start to finish. Nestl scientists also play their part in communicating the health and wellness benefits of products to consumers. Nestl nutritionists world-wide work to ensure that all nutrition communication, both on and off pack, is locally relevant, as well as scientifically sound. Beyond sound nutrition, the future of foods will increasingly be driven by science. Nestl scientists are looking ahead to the foods of the future. Nestl R&D is translating nutrition and food science in two ways: From consumer needs into research priorities From emerging science into consumer benefits, and services. The vision of Nestl R&D is long term. A glimpse of how Nestl R&D is helping to shape the future of foods is provided through these internet pages.

Werner Bauer Chief Technology Officer, Nestl S.A. Innovation, Technology and Research & Development

 Does Nestl perform tests on animals?

Frequently Asked Questions - Current topics

Nestl does not use animal testing to develop conventional foods and drinks, such as coffee, tea, cereal and chocolate, and which have been part of the diet for many years. All safety authorities rely on animal testing as part of the dossier that industry has to provide to demonstrate that foods are safe when there is no history of safe use. Nestl includes animal studies as part of its nutrition science research program. This research provides the scientific basis for developing food with novel ingredients for special nutritious purposes, as well as medical foods that help people with acute and chronic medical conditions. We are always developing new scientific methods that refine the animal testing process, reduce the number of animals being tested, and remove the need for animal testing altogether wherever possible. All our animal studies are evaluated and approved by the official local animal ethics authority and done in full compliance with the relevant animal welfare regulations.

Other topics

Why is Nestl opposed to the traffic light scheme of food labelling? What is Nestl's position on palm oil? Fake Nestl Aid Organization and Nestl Foundation websites What is Nestl's position on biofuels? Is it right that Nestl profits from selling bottled water? How does Nestl compensate/pay communities for the water they extract from their land? Do you agree that water is a basic human right? What are Nestl's infant formula business practices in the Developing World? What is the Nestl policy on genetically modified organisms (GMO)? What are trans-fatty acids?

Why is Nestl opposed to the traffic light scheme of food labelling? Nestl is opposed to an introduction of traffic lights or other simplistic schemes based on the erroneous principle of "good products - bad products" and which focus only on negative aspects of nutrients and do not offer factual information. A "green", "amber", "red" light approach to the nutritional merits of a product does not help to place the food in either the context of an individual's needs, or in the context of a balanced, varied and moderate diet. Furthermore, traffic light schemes do not encourage step by step product improvement, since only major reductions of a nutrient would change a traffic light's status. On the other hand, Nestl supports Guideline Daily Amounts (GDAs) which provide a guide to the daily intake for key nutrients such as protein, fat, fibre, sugars, calories, salt and/or sodium. GDAs are factual and objective and ensure consumers can evaluate a product's role in the daily diet. In this respect, Nestl (in conjunction with other major food companies) publicly announced its commitment to apply GDA labelling on its products in Europe. This was achieved by end of 2008. Presently, the GDA Scheme is not only applied by all large companies: 58% of medium-size and 34% of small-size companies are also using or plan to use GDA labelling. Nestl has introduced the Nutritional Compass on all of its products worldwide to help consumers make informed decisions with a focus on Nutrition. In the context of the current revision of the EU legislation on general labelling including nutrition labelling, Nestl takes an active part with other stakeholders in identifying ways to best communicate relevant and empowering nutrition information to consumers.

What is Nestl's position on palm oil? Nestl views destruction of tropical rainforests and peatlands as one of the most serious environmental issues facing us today. It is estimated that rainforest destruction contributes to around 20% of carbon dioxide emissions more than the entire transport sector. The growing use of biofuels is a serious factor in this destruction which we have vigorously condemned.

Read our full statement on deforestation and palm oil.

Fake Nestl Aid Organization and Nestl Foundation websites We have received a number of emails alerting us to fake websites called the Nestl Aid Organization or the Nestl Foundation or similar. The emails, claiming to be from Nestl or a related organization, usually announce that the recipient has won some money or a grant and only needs to fill in their details or pay a small sum of money to release this. In some cases the 'award' has been the offer of a job interview. The email is usually sent from a different domain than the site quoted, often a web-based email domain. Nestl does not operate in this way. You are advised to forward any such mails to us at abuse@nestle.com to allow us to forward them to the relevant law-enforcement authorities. Please ignore any such instructions to send money or your personal details. You can always contact your local Nestl office to confirm whether you have won a promotional prize or other offer - just use the 'contact us' form at the top of this page. Nestl will never ask you for money as a condition of winning anything. We have had some success in closing these fake operations down, thanks to the alertness of Nestl consumers around the world, and will continue to pursue fraudulent operators as soon as we are aware of them, and to the limits of the law. Nestl does have a bona fide website run by the Nestl Foundation at http://www.nestlefoundation.org. This is devoted to the study of problems of nutrition in the world.

What is Nestl's position on biofuels? Nestl supports sustainable energy use: over the last five years, Nestl has reduced its energy consumption per tonne of product by 28% and its greenhouse gas emissions by 32%. Nestl believes that any decision on the use of energy sources must be based on a systematic cost benefit and life cycle analysis, taking into consideration the social and environmental impact, including the effects on food prices and water. The current production of biofuel relies on the extensive use of crops such as maize and wheat. This has already led to significant price increases and will, in the long term, create food shortages for millions of consumers from lower-income groups for whom basic foodstuffs need to be affordable. The large scale expansion of these agricultural raw materials for biofuel production will aggravate the problem of water scarcity, as every liter of biofuel made from irrigated maize or soybeans requires between 500 and 5,000 liters of water. Agriculture already uses 70% of available water sources. Furthermore, depending on crop type and geography, CO2 savings compared to fossil fuel can be very small, in some cases only 10%.

Is it right that Nestl profits from selling bottled water? Many people consider bottled water to be an example of companies making profits on what should be public property. First, Nestl Waters may be the world's largest bottled water company, but it still uses only 0.0009 percent (less than one millionth) of total fresh water consumed worldwide, while Nestl as a whole - including food manufacturing - uses only 0.005 percent. Nestl is therefore not a significant factor in the global access-towater debate: agriculture uses 70 percent of total available fresh water, industry 20 percent and domestic users 10 percent. The price of bottled water is closer to that of other bottled drinks than to tap water because it includes the same expenses incurred by all bottled drinks producers: the actual cost of the water, ensuring water purity, providing sterile bottles, ensuring a clean bottling process and, finally, all logistical costs. For more information on water, please visit our water section

How does Nestl compensate/pay communities for the water they extract from their land? There are two situations that are specific to Nestl Waters when it comes to managing the water resources we operate; one thing that is common, however, is the responsible manner in which we operate these water resources. In the US and Canada, Nestl Waters North America is generally the owner of the land and the water resources we operate. Nestle Waters North America frequently buys the land and develops the water supply and delivery systems at its own expense. NWNA usually buys the surrounding land for environmental protection, too. They then comply with the local authorities regulations and permits for water use. The amount of water used is regulated at the state level by the environmental authority. In the rest of the world, NW does not own the water resources we operate. We generally own the buildings and equipment necessary to bottle the water for which we have the permission, as part of a contract, from the ground owner and local authorities (often one and the same), to extract a given volume of water. The right to operate the water resources is negotiated and agreed with the ground owner and local authorities, and payment for the water is included in this contract.

Do you agree that water is a basic human right? Water is both a human right and a commodity, in that people pay for the water they use, and it plays a crucial economic role. While water wasn't included in the 1948 Universal Declaration of Human rights, it was considered to be self-evident as a human right, since it is a basic necessity of life. At the UN International Conference on the Environment that was held in Dublin in 1992. The Conference Report set out recommendations for action at local, national and international levels, these included Four Principles. Principle Four acknowledges the economic value of water: Water has an economic value in all its competing uses and should be recognised as an economic good. Within this principle, it is vital to recognise first the basic right of all human beings to have access to clean water and sanitation at an affordable price. This is a non-binding statement. In 2002, the UN Committee on Economic, Social and Cultural Affairs recognised access to water as a stand-alone right in General Comment No. 15. General Comments are authoritative statements of the Committee of its understanding of rights enshrined in the International Covenant on Economic, Social and Cultural Rights; they are only binding on those States Parties that have accepted them. The Committee stated "Everyone is entitled to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses. Major capital investments are needed to build, maintain and operate healthy water delivery systems, and water is obviously sold to users. We also pay for water when we buy food and all products that use water in their production. For instance, according to UNESCO, it takes up to 1,000 tonnes of water to produce 1 tonne of grain. In most cases, access to safe water and treatment of water polluted by human activity does not come without substantial investments, so there is a price for water. The United Nations, the International Union for Conservation of Nature, and others all point out that it is governments who are charged with enforcing human rights guarantees, including water. According to the UN, it is the duty of governments to make sure that all people can get access to at least a basic amount of water of about 20 liters.

What are Nestl's infant formula business practices in the Developing World? Nestl conforms to the spirit and the letter of the WHO Code on marketing breast milk substitutes. Please visit our Babymilk issues site for a comprehensive discussion of this topic.

What is the Nestl policy on genetically modified organisms (GMO)? From its inception more than 130 years ago, Nestl has built its business on successfully applying scientific breakthroughs and technological innovations while taking full responsibility for the quality and the safety of its products. Throughout these years Nestl has been manufacturing and marketing products tailored to meet the diverse needs and preferences of consumers all over the world. This broad experience has provided Nestl with thorough insight into and understanding of consumer demands, both in developing and developed countries. Clearly, consumers' perceptions and opinions differ in the various regions of the world. Hence Nestl has always strived to respect these differences and to take them into account in its activities.

Gene technology in food production With this vast experience, Nestl recognizes the potential gene technology has in the longer term to improve the quality, availability and nutritional value of food. Gene technology has the potential to increase food production and to support sustainable agricultural practices. For those reasons, Nestl supports a responsible application of gene technology for food production based on sound scientific research.

Safety The safety of our products and the integrity of the ingredients from which they are manufactured are paramount to Nestl. Genetically modified crops, as all raw materials used by Nestl, comply to strict regulatory and safety evaluations. WHO, FAO, OECD and numerous independent scientific bodies have concluded that genetically modified crops, including ingredients derived from them, that have passed food safety evaluation procedures, can be registered as safe for use in food production. Nestl concurs with their shared opinion that such crops are as safe as their traditional counterparts.

Consumer information and labeling Consumers' confidence in the food they are buying is supported by having access to information. Nestl's Consumer Services are well equipped to provide this access and thus are the first source of information, including the use of ingredients, derived from genetically modified crops, in Nestl products. Many governments now have implemented or are considering regulations for the use and labeling of these ingredients. In the absence of a global agreement on the labeling of ingredients, derived from genetically modified crops, and recognising governments responsibility for the regulatory process, Nestl strictly adheres to national laws and regulations regarding their labeling.

Consumer perceptions and the future needs of society As a global food manufacturer and marketer, Nestl takes into consideration local needs, cultural differences and consumer preferences as well as attitudes concerning the use of ingredients derived from genetically modified crops. In some regions of the world, governments have expressed a keen interest in this technology as a potential tool to address their country's future food requirements. Nestl's long term experience in food production can be a valuable resource in finding the right balance between these elements. This may well result in different solutions in various regions of the world, without jeopardizing in any way the safety and quality of its products. Provided their safety is proven, as required for all ingredients, Nestl will continue to use ingredients derived from genetically modified crops wherever appropriate. Nestl position on European GMO legislation (pdf, 7 Kb)

What are trans-fatty acids? Trans fatty acids (TFA) are a specific form of fat formed when liquid oils are turned into solids such as shortening and hard margarine in a process known as partial hydrogenization. According to Western European dietary data, half of TFA consumed occur naturally in foods such as milk and meat products. The rest comes principally from oil and fats (19 percent), or prepared foods such as bakery goods (13 percent), chips, French fries, pizzas and other savory pies. Why are they bad? Eating TFA can result in undesirable effects on blood cholesterol (raising LDL, or 'bad' cholesterol; lowering HDL, or 'good' cholesterol) and thus could potentially have a bad impact on heart health. What is Nestl doing about TFA? Nestl considers that the reduction of TFA in prepared food products is important and has been committed since 1993 to reduce TFA in prepared food products. In a normal consumption pattern, TFA intake would not exceed 3% of the total fat in foods, or 1% of the daily total energy intake as recommended by the World Health Organization. Priority was given to reduce TFA in products which are consumed by children and to products containing higher levels of TFA such as soups, snacks, pizzas, ready-made meals and certain confectionery items. (Nestl has relatively few products such as oils, meat products, cheese, bakery goods, and butter which are principal sources of TFA). Since 2002, Nestl has reduced the use of trans fatty acids in its product portfolio by more than 25,000 tonnes. Compliance with the TFA reduction policy is audited in our businesses globally. By end 2006, 95% of Nestl's product range complied with the policy.

Thank you

Reporter: Noel B. Hungria Professor: Dr. Danilo Reyes