Against the background of pressure from the new customs policy of President Trump, the giants producing consumer goods are faced before choosing, increase prices or absorb costs. Nestlé has decided to risk, do not raise prices, hoping to strengthen sales and return the market share. This differs from the approach of Colgate-Palmolive, Procter & Gamble and Kraft Heinz, which have announced the decrease in prices and decreasing sales, trying to cover the possible effect of 10% of Trump.
Nestlé's new director Laurent Frasis claims that the company is "immune" to customs pressures, as 90% of its production is local. Nestlé predicts a decline in profitability from 17% to 16%. If customs effects are continuous or there is no sales, the company's management may be changed again, Reuters reports.
At the moment, Nestlé plays a dangerous but possible victorious game, sacrificing profits to keep the market. However, if consumers continue to prefer cheaper brands, even that strategy will not be effective.
