European Food and Drink Sector Developments Chime With Core Views

For the major food and drink companies in Western Europe the key issue that they have contended with in recent quarters is the run up in commodity prices in late 2010 and the beginning of 2011 (see first chart). Quarterly results posted by the world's major food and drink firms underline that for most this has put downwards pressure on operating margins (see second chart). However, Europe's two largest food producers, Nestlé and Danone, have weathered the storm better. These two do not include operating margins in their quarterly results, but their latest half-year results reveal that both have actually

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