NEW DELHI : Nestle India’s board has approved a staggered increase in royalty payout to the company’s Swiss parent Société des Produits Nestlé S.A.
The consumer goods company will hike its payout to Nestlé S.A. to 5.25% of net sales over the next five years, up from the current 4.5% per annum. The new royalty fee will be effective from 1 July, the maker of Maggi noodles said in a regulatory filing.
The Indian arm of the Swiss consumer goods company had in 2019 announced that it would seek approval of its shareholders every five years for royalty payments to its parent company, after receiving investor and proxy firm feedback on the issue.
Accordingly, Nestle India reviewed its royalty payout to make it more inclusive. The company had then said that while its general licensing agreements are reviewed periodically by an audit committee, “the resolution has been modified to provide for shareholder approval every five years in accordance with applicable laws and regulations”.
Last year, consumer goods major Hindustan Unilever Ltd raised its royalty payout to its European parent to 3.45% per annum from 2.65% over three years.
For 2023, Nestle India reported total sales of ₹16,790 crore with a net profit of ₹2,390 crore.
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Published: 05 Apr 2024, 08:09 PM IST