How Nestlé's pioneering China business fell into disarray
Source · Consumer Goods desk
— Summary
Nestlé's once-pioneering China business has collapsed into a spiral of distributor disputes, "channel stuffing" and leadership churn, according to a Financial Times investigation drawing on former and current executives. Greater China generated 5% of Nestlé's SFr89.5bn ($114.8bn) annual revenues last year, but sales in the region fell 10.2%, making it the Swiss group's worst-performing major market. Sales have declined in six of the past seven years, despite more than 30 factories and research facilities.
Distributors including Feng Liqing, who has a 100-square-metre warehouse in Hebei full of unsold Nestlé stock, say the company pressed them to take on more inventory than the market could absorb to hit internal sales targets. Feng says she is owed about Rmb1mn ($147,000). Former executives describe the practice as an "easy way to achieve your bonus and show numbers" that ultimately alienates distributors and damages the brand.
The China mess sits inside a wider governance crisis. CEO Mark Schneider was ousted in 2024, replaced by company veteran Laurent Freixe — who was fired a year later for an affair with a subordinate. Chair Paul Bulcke stepped down weeks later under shareholder criticism. Nestlé, founded 159 years ago, opened its first Shanghai office in 1908 and helped build China's modern dairy industry in the 1980s. Source: Financial Times, 22 April 2026, Madeleine Speed, Nian Liu and Thomas Hale.
The story in one line. Channel stuffing, governance scandals and fierce local competition have turned Nestlé’s 117-year bet on China into its worst-performing major market, with sales falling in six of the last seven years.
Key numbers
5% of Nestlé’s SFr89.5bn ($114.8bn) annual revenue comes from Greater China
−10.2% Greater China sales last year — worst major market
Sales declined in 6 of the past 7 years
30+ Nestlé factories and research facilities in the region
Rmb1mn (~$147k) claimed owed to distributor Feng Liqing
1908 Nestlé’s first Shanghai office; 159-year-old company
Schneider ousted 2024 → Freixe fired 2025 → Bulcke stepped down weeks later
Why it matters
Channel stuffing inflates short-term revenue but destroys distributor economics, which is what Nestlé is now living through. The China deterioration has coincided with — and was masked by — a leadership vacuum at the top of the group, which is itself a warning to any MNC relying on regional autonomy rather than central oversight. Nestlé is a test case for whether western CPG brands can still compete in a Chinese market where local rivals and slowing consumer spending now dominate.
Takeaway
The gap between a 10% sales decline and “30+ factories and research facilities” is the core problem: Nestlé has built capacity for a market that no longer wants it at the scale forecast. Until the new leadership team fixes the distributor base and proves real consumer pull rather than channel fill, a turnaround narrative isn’t credible.
Source: Financial Times, 22 April 2026, Madeleine Speed, Nian Liu and Thomas Hale.