Rationalization in Italy and Brazil

Vevey, July 5, 2000

Nestlé continues to implement its policy of focusing on core strategic business activities and divesting certain production activities with low added value to specialized suppliers. In line with this policy, Nestlé Italy has signed an agreement with Ferrarini, a family business and one of the major manufacturers of specialty meat products in Italy.

According to the terms of this agreement, Ferrarini will create a new company which will acquire the brand and business activities of Vismara (a product range including ham, salami and mortadella). The transaction includes the sale of the factory in Casatenovo, Lecco, which employs 375 people. In 1999, Vismara achieved sales of some CHF 144 million. The agreement, which is subject to approval by Italian authorities, will have no effects on jobs.

Meanwhile, Nestlé Brazil has signed an agreement with the company Emege Produtos Alimenticios S/A, which specializes in the production of flour and pastas sold under private labels. According to the terms of this agreement, Emege will take over Nestlé's pasta factory in Uberlândia, Minas Gerais. This factory will continue to manufacture its products, which will be sold – as is the case today – by Nestlé Brazil under the Maggi brand.

This contract will not affect other products in the Maggi range (including bouillons, soups, frozen prepared dishes, condiments, sauces and instant noodles). These products will continue to be produced and sold directly by Nestlé. The approximately 100 jobs at the Uberlândia factory will not be affected by the agreement.