Nestle sees slowing sales growth in price-conscious Europe

Nestle is the world's biggest consumer food group

Nestle, the world's biggest consumer food group, says sales and profits are being held back by weak demand in Europe.

The company, which owns Nescafe and Perrier, said profits rose 3.7% to 5.1bn Swiss francs ($5.5bn, £3.3bn) in the first six months of 2013.

Overall sales growth slowed from 4.6% to 4.1% throughout the half, but in Europe, growth fell from 1% to 0.6%.

Nestle said it had cut prices in a number of areas.

It said it had "adjusted prices downwards" to make its products more attractive for cash-strapped consumers, who were currently "value-conscious''.

Nestle said it still expected underlying sales growth for the year to grow by 5%, although that would put it well below last year's 6.6% growth.

Developing market growth also slowed sharply, falling from 12.9% to 8.2%.

Nestle's chief financial officer, Wan Ling Martello, told a news conference: "It's not going to be easy. It's going to be a stretch."

Disappointed investors sent the shares down 2.1% in morning trade.

The company's products also include Haagen Dazs, KitKat and Shredded Wheat. Nestle also owns the Purina pet food brand, which produces Felix cat food.

Earlier this year, Nestle was caught up in the horsemeat scandal. It removed beef pasta meals from shelves in Italy and Spain after tests revealed traces of horse DNA.

Last month, the company also cut prices of some of its infant milk formula products in China, a day after the country launched a probe into alleged price fixing by foreign infant milk makers.