Nestle(US:NSRGY) Xin Lang Cai Jing·2025-12-11 00:08Core Viewpoint - Nestlé China is currently facing a "channel crisis" characterized by significant payment delays to distributors and a chaotic distribution network [2][19]. Group 1: Payment Issues - Multiple distributors have reported being owed approximately 1 million yuan in advance payments, with delays lasting several years [3][21]. - A distributor from Jiangsu reported being owed around 900,000 yuan from 2018 to 2022, and the debt increased by an additional 200,000 yuan after transitioning to a dealer role [4][22]. - Distributors are often required to provide proof of expenses to receive payments, with Nestlé indicating a willingness to pay up to 70% of owed amounts, contingent on the acceptance of documentation [3][24]. Group 2: Distribution Network Problems - The distribution model involves distributors paying dealers upfront for goods, but returns are processed through dealers, complicating the payment chain [8][23]. - Distributors are often left vulnerable due to the lack of direct contracts with Nestlé, making it difficult for them to claim owed payments [9][24]. - Internal reports suggest that the management of Nestlé China has been chaotic for years, with frequent changes in local office personnel leading to unresolved payment issues [5][25]. Group 3: Sales and Market Performance - The Greater China region has seen a decline in sales, with revenue dropping from 6.913 billion Swiss francs in 2019 to 5.558 billion Swiss francs in 2021, reflecting a downward trend [13][27]. - The organic growth rate for the Greater China region was -6.1% in the first nine months of 2025, indicating ongoing struggles despite price reductions [13][27]. - Analysts attribute the decline to brand and product aging, as well as slow decision-making processes within the foreign brand [14][28]. Group 4: Management Changes and Strategic Shifts - In response to ongoing challenges, Nestlé has undergone significant management changes, including the appointment of a new CEO for the Greater China region [15][31]. - The new CEO aims to shift the focus from merely expanding distribution to actively driving demand through better products and emotional connections with consumers [31][32]. - There is an emphasis on internal reforms to address the declining performance, including the need for innovative products that align with evolving consumer preferences [32].