Nestle (NESN.S) shares were under pressure on Friday as investors weighed the potential impact of Novo Nordisk’s (NOVOb.CO) blockbuster weight-losing drug Wegovy and how it could reduce spending on food.
The KitKat and Nescafe coffee maker’s shares were down 2% and headed for their lowest level in more than two years. The pan-European food, beverage, and tobacco index (.S600FOP) fell 1.7%.
“I think it comes after Walmart’s comments regarding the impact on weight loss drug consumers perhaps buying less,” the head of European consumer equities at Kepler Cheuvreux, Jon Cox, said.
Walmart’s (WMT.N) U.S. branch CEO John Furner told Bloomberg on Wednesday that the company saw a slight pullback in food consumption with people taking appetite-surpressing drugs such as Wegovy.
However, Cox does not regard this as a substantial risk to Nestle and the broader food industry in the long term.
Bruno Monteyne from Bernstein also pointed to the Wegovy impact, but saw little logic in the sell-off.