Danone hit by Morocco consumer boycott and China baby formula decline
Food company Danone reported it is on track to meet full-year expectations despite a consumer boycott in Morocco and a slump in baby food sales in China.
The French company said like-for-like sales grew by 1.4 per cent in the third quarter of the year and that it would target double-digit earnings per share growth.
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The depreciation of the Argentine peso, Turkish lira and Brazilian real drove down consolidated sales in the third quarter, the company said, and mass online-led protest in Morocco to boycott major suppliers of milk, bottled water and saw Danone's sales in the country decline by 35 per cent.
It was also hit by a 1.5 per cent decline in specialised nutrition products and a 20 per cent drop in baby formula sales in China after 12 months of "exceptional growth".
The hot summer boosted water sales in Europe, the company said, and dairy and plant based product sales picked up.
Danone chief executive officer Emmanuel Faber said: “In the latest quarter, we have seen an encouraging return to growth in essential dairy and plant-based, alongside strong momentum in waters.
"This demonstrates how Danone is balancing growth across its businesses.
"Our performance in EDP and Waters compensated for challenging conditions in China where Early Life Nutrition shows changes in market dynamics following a period of exceptional growth.
"We also have the foundations in place to navigate current emerging market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth. As a result, we have today reaffirmed our guidance for the full-year.”
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