Nestle cuts growth forecast as food prices fall

Swiss food giant Nestle has cut its annual growth forecast to 3.5%, from the 4.2% it forecast in August.

The firm, whose brands include Nespresso and KitKat, blamed "the current softer environment", which it says is causing food prices to fall.

Nestle's nine-month sales were 65.51bn Swiss francs ($66.19bn, £53.93bn) up from 64.86bn Swiss francs last year.

Like its rivals, the firm has struggled to raise prices amid intense competition between supermarkets.

One main rival, Unilever, has increased prices in countries where the currency has weakened, such as the UK, as goods imported into such countries cost more.

Unilever is the UK's biggest producer of branded household goods, making products including Marmite and Pot Noodles.

In a striking example of the battle between suppliers and retailers, both keen to maintain their profit margin, certain Unilever products were temporarily unavailable on Tesco's website after Unilever attempted to pass on its rising costs as higher wholesale prices.

Sterling has dropped by 16% against the euro since the UK's Brexit vote.

But Nestle is targeting sales volumes over pricing.

Chief executive, Paul Bulcke, said in a statement: "In an environment marked by deflation and low raw material prices, we continued to privilege volume growth."