Nestle sees positive impact from China milk scandal

NEW DELHI (Reuters) - Nestle SA NESN.VX, the world's largest food company, expects the recent China milk scandal to positively impact its business as its products have been cleared by Chinese authorities, the Swiss group's chairman said on Friday.

“All our products are 100 percent safe...Sales in China are rather being favoured,” Peter Brabeck-Letmathe told reporters in India’s capital, when asked whether the scandal would affect the company’s business.

“It’s rather positive than negative,” Brabeck said.

Thousands of Chinese children have been hospitalised, sick from milk formula tainted with melamine, a cheap industrial chemical that can be used to cheat quality checks. Nestle has said its milk products in China and Hong Kong are safe.

Brabeck said he would not comment on media reports that Nestle was talking to Hershey Co HSY.N about buying all or part of the U.S. chocolate maker.

London’s Daily Telegraph reported on Sept. 21 that the Vevey-based maker of Nescafe coffee, KitKat chocolate bars and Maggi soup was in talks with Hershey.

Nestle, which considers India as one of its fastest-growing markets, will double its investment in the country to 6 billion rupees ($129 million) in 2009, Brabeck said, but he and other officials declined to say what it would be used for.

($1=46.5 rupees)

Reporting by Devidutta Tripathy; editing by Sue Thomas