June 22, 2014 / 10:30 AM / 5 years ago

Nestle aims to double direct commodities suppliers: paper

The logo of Nestle is seen on the company building in Mexico City, January 24, 2014. REUTERS/Edgard Garrido

SPIELBERG Austria (Reuters) - Swiss food giant Nestle NESN.VX aims to boost its share of direct commodity purchases to ensure it keeps a tight grip on quality and supply chains, Chairman Peter Brabeck told an Austrian newspaper.

“The consumer now wants to know where the coffee in the Nespresso capsule comes from. We want to double the ratio of commodities we buy directly - so not via traders - in the years ahead, especially for coffee and cocoa,” he told Kurier.

This is “not because of the price, but rather due to quality and traceability. Of course also because the consumer demands this in the age of social media,” he added.

Nestle now has 670,000 farmers under contract, he said.

Asked if Nestle would soon do more than half its business in Asia, he said: “In terms of volume, yes, but in terms of value, no, because of the exchange rate effects. China is already our second most important market after the United States.”

Around two-thirds of its sales in China come from brands it bought there, he said.

Brabeck said he was concerned about the emotional debate being waged over a proposed free-trade pact between Europe and the United States, saying it was time for a factual discussion over a deal that could give economies a major boost.

“At a time that we fight for every tenth of a percent of growth, we should at least discuss the topic objectively,” he said, dismissing critics’ concerns that a deal could weaken European food safety standards.

“As far as I know, no one has died in the United States from eating American products. If that is our fear then we also shouldn’t go on holiday in the United States.”

Reporting by Michael Shields; Editing by Nick Macfie

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