Nestlé has dismissed chief executive Laurent Freixe with immediate effect after an investigation into an “undisclosed romantic relationship”, and appointed Nespresso head Philipp Navratil as his replacement.
The Swiss consumer goods company said on Monday that the departure of Freixe, who was promoted to chief executive last August after almost 40 years with Nestlé, came after an inquiry into a relationship with a direct subordinate which breached its code of business conduct.
Nestlé chairman Paul Bulcke said: “This was a necessary decision. Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé.”
The 191 billion Swiss Franc (€204 billion) group behind brands including Kit Kat and Nescafé first launched an investigation into Mr Freixe’s personal relationship with a colleague in late spring after a number of reports were made through Nestlé’s internal complaints system called “Speak Up”.
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Staff raised concerns about potential conflicts of interest and favouritism, said people familiar with the matter.
Last month, Nestlé told the Financial Times that, following the internal investigation, it found the claims were “unsubstantiated”.
However, after internal complaints persisted, the Nestlé board subsequently decided to launch another investigation with the help of external counsel. This found the claims to be substantiated, said a person briefed on the situation.
Freixe’s departure, after only one year in the job, adds more upheaval in what has been a difficult year for Nestlé, as it contends with slowing sales in its core businesses.
Shares in Nestlé fell 3.2 per cent in early trading on Tuesday. They have slumped more than 40 per cent since hitting a high in 2022.
French authorities raided Nestlé’s offices in July as part of an investigation into the company’s alleged use of unauthorised filtration methods in its bottled mineral water. The company also had to issue a recall of frozen meals in the US this year over contamination concerns.
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Since replacing Mark Schneider as chief executive of the group, which has a sprawling portfolio of more than 2,000 brands spanning coffee and confectionery to petcare, Freixe had been trying to refocus Nestlé on its core businesses and restore a company culture he felt had been lost.
The French man, who had previously worked for Nestlé in roles in Hungary, Spain and Latin America, told the FT in May that his predecessor’s strategy had “weakened the fabric” of the company.
Mr Bulcke announced plans to step down as chairman in June, and former Inditex chief Pablo Isla has been proposed as his replacement.
Mr Navratil, Mr Freixe’s replacement, started with Nestlé as an internal auditor in 2001 and has since led businesses across Latin America and the coffee portfolio, most recently at Nespresso. He joined the executive board this year.
Jean-Philippe Bertschy, an analyst for Swiss bank Vontobel, said the leadership change comes at a “sensitive juncture” for Nestlé.
“Nestlé is already under the spotlight ... the appointment of Philipp Navratil, a proven leader with an excellent track record, is encouraging ... as investors’ nerves have been tested for several months,” he added.
Mr Freixe did not immediately respond to a request for comment.
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