The Swiss food and drinks giant has disposed of Yinlu to concentrate on its key products in Greater China
Food Wise Co. has acquired the Yinlu peanut milk and canned rice porridge businesses in China from Nestlé in a transaction expected to close by the end of the year. Food Wise Co. is controlled by the family of Yinlu founder Chen Qingshui.
Nestlé hinted it might sell the business at the end of July when it reported its half-year financials.
The deal covers all Yinlu’s operations, including its five factories in Fujian, Anhui, Hubei, Shandong and Sichuan. The company’s brands had sales of 700 million Swiss francs ($767.6 million) last year. The financial terms of the transaction were undisclosed.
Nestlé stated it disposed of the business because in China it wants to keep its focus on infant nutrition, confectionery, coffee, culinary, dairy, and pet care.
As part of the transaction, Nestlé will retain its ready-to-drink (RTD) Nescafé coffee business and distribute the products across most of the Greater China region.
Yinlu will continue to manufacture the Nescafé RTD products for Nestlé and will distribute them in several provinces. Yinlu will also continue to manufacture and sell Nestea products under licence from Nestlé.
The Greater China region is Nestlé’s second-largest market with sales of nearly 7 billion Swiss francs last year. The company said it has invested about 800 million Swiss francs in the region during the past five years.
Date published: 25 November 2020