ousting its second chief executive in a year and throwing the Swiss food giant into its deepest leadership chaos in decades. Freixe’s sudden dismissal followed an investigation into an undisclosed romantic relationship with a direct subordinate that breached Nestle’s code of business conduct, Nestle said late last Monday.

Freixe was replaced by Nespresso chief Philipp Navratil, a rising star at the world’s largest food company as it battles slowing sales, the impact of United States tariffs and eroding investor confidence after years of underperformance. The Frenchman’s predecessor Mark Schneider failed to cope with the challenge, and it cost him his job in August 2024. Paul Bulcke, CEO from 2008 to 2016, will step down as chairman in April and will be replaced by Pablo Isla, a former CEO of Spanish fashion retailer Inditex.

“The loss of two CEOs and a chairman in a year is of historic proportions for Nestle,” said Ingo Speich, head of corporate governance and sustainability at Deka, a top 30 Nestle investor. “The new CEO needs to fix the business model and bring volumes back. He needs to do better M&A [mergers and acquisitions] and focus more on emerging markets.” The upheaval underscores the struggle not only at Nestle but also other consumer goods companies to reignite sales and recover stock values as the post-pandemic cost-of-living crisis drives consumers towards cheaper alternatives. Meanwhile, US tariffs threaten to further inflate prices and alienate already price-sensitive shoppers. Shares in the maker of Nescafe and KitKat chocolate bars were down 0.8 percent in Zurich by 1:18pm (11:18 GMT).

The company said concerns about a possible relationship were raised by staff via the company’s internal reporting channel, Speak Up, although an initial investigation was unsubstantiated. Freixe had initially denied the relationship to the board, a company spokesperson said. When staff concerns persisted, Nestle said it ordered an investigation overseen by Bulcke and Lead Independent Director Isla with the support of independent outside counsel. Swiss media reported that Swiss lawyers from the Baer & Karrer law firm helped with the inquiry. (Al Jazeera/Reuters)