The world’s number one food and drink company Nestlé has seen its sales fall 7.5% in the first three months of the year, as it felt the impact of the strength of the Swiss Franc.

Nestlé’s sales reached SFr19.71bn (US$14.4bn) compared to SFr21.31bn for the same period last year. Analysts had predicted only a 5.8% drop.

Nestlé chief executive Peter Brabeck said in a statement: “Our consolidated sales clearly took a hit from the strong Swiss franc, but we expect this effect to taper off in the course of the year.”

However the company’s real internal growth rate, which strips out the impact on sales of currency effects, price changes, as well as acquisitions and divestitures, increased by only 2.5%. Again the number was below expectations which had come in around the 3-4% mark.

The forecast for 2003 remained challenging the company said, although it is expecting to improve its performance during the year.

“We are confident that the rest of the year will bring an acceleration of growth and that we will therefore achieve our stated objective of improving the group’s performance,” Brabeck said.