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Nestlé takes a bite out of Mövenpick

Mövenpick sells its ice-cream brand to Nestlé. swissinfo.ch

Nestlé has expanded its ice cream empire by acquiring the Mövenpick brand.

This content was published on January 23, 2003 - 13:57

The Vevey-based company is already number one in the United States ice cream market and is seeking worldwide dominance.

The acquisition will join Nestlé's overweight portfolio, alongside popular brands such as Häagen-Dazs, scooped up in 2001.

Annual ice cream sales worldwide at Mövenpick are worth SFr 300 million ($220 million), with the Swiss market accounting for some SFr40 million.

The acquisition is expected to lead to at least 30 job losses at various Mövenpick sites.

Unconfirmed reports say that the main production and development site at Bursins, near Lausanne, will be closed and that Nestlé will concentrate future production at Rorschach, where it already produces the frozen product.

Licence network

Mövenpick's 19 ice-cream flavours are sold around the world via a network of ten licence partners in countries such as Germany, Norway, Sweden, Finland, Egypt and Saudi Arabia.

Nestlé already held the licence for the important German market through its acquisition last year of the German-based Schöller group.

That purchase, which took place in March 2002, led the Mövenpick group to re-evaluate its presence in the ice cream business.

A number of options were put on the table, including directly marketing its products to the German market, before the concern decided that the best way forward would be to sell the unit to Nestlé, which would maintain Mövenpick's position in the premium ice cream market.

Sold short?

The fact that the purchase price has not been disclosed has led to speculation that Nestlé managed to snap up the ice cream brand for a bargain figure.

At least that is what Marc Vifian, analyst with Lombard Odier Darier Hentsch, one of Switzerland's largest private banks, told swissinfo.

"Nestlé probably had the possibility to take Mövenpick at a good price... [The acquisition] will only slightly increase [Nestlé's] position in Switzerland and Germany in the ice cream business," he said.

However, Vifian agreed that Nestlé had undertaken a strategic move to increase its market share over that of its rival, the Dutch-British giant Unilever.

He was less optimistic about the future of the Mövenpick group, now that it had lost its best-known brand.

"I am not sure Mövenpick will be able to be successful without its ice cream business. Its current business model is not sustainable."

Food and wine

The group's other business areas include gastronomy, wine and fine foods, such as salmon and coffee.

Vifian's gloomy prediction was that the group would probably be sold off piecemeal, after its unsuccessful attempts to penetrate the Asian market.

"It's a pity. They had a very strong brand and they decided to sell it... It's a sign of weakness for Mövenpick."

The new deal is subject to regulatory approval in certain countries.

swissinfo, Faryal Mirza and Scott Capper

Key facts

Nestlé has acquired Mövenpick's ice-cream business for an undisclosed purchase price.

Mövenpick sells 56 million litres of ice cream annually, with sales worth SFr 300 million.

Nestlé already owns a number of popular ice-cream brands, such as Häagen-Dazs and Schöller.

Nestlé is striving towards the number-one spot in the world market.

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