Nestlé and Barry Callebaut have broadened their strategic cooperation in Europe with a project spanning three countries that will include the transfer of production facilities in Italy and France and a long-term supply agreement for Barry Callebaut to provide chocolate mass to Nestlé factories in Russia.

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Nestlé said that the deal includes the transfer of its chocolate factory in Dijon to Barry Callebaut. Widening the product range should reverse declining volumes and improve the plant’s competitiveness, Nestlé added. Under the proposed agreement, Nestlé will outsource production to Barry Callebaut, which will also be able to use existing capacity and equipment to manufacture its own products. The agreement would also see Barry Callebaut take control of Nestlé’s Italian cocoa liquor and liquid chocolate facility in Italy.


The acquired capacity amounted to around 100,000 tonnes and the supply agreement amounted to 43,000 tonnes, or around 4% of Barry Callebaut’s total volumes, Barry Callebaut said.


Nestlé said that the move away from primary cocoa production is part of its ongoing strategic transformation process that has seen the proposed sale of the cocoa liquor and chocolate mass production facility at the San Sisto factory in Perugia.


“Nestlé is convinced that the challenging and changing chocolate market in Europe remains promising, provided that the right structures are in place. Nestlé sees the strategic co-operation with Barry Callebaut as a positive element in the group’s determination to remain a key actor in the European chocolate market,” the company said in a statement.

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The deal is subject to employee consultation and regulatory approval. The companies said they expect it to be completed during the summer of 2007.


Following the announcement, Barry Callebaut shares have risen 9% at time of press, increasing to CHF859.50.

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