RNS Number:2728N
Nestle SA
07 June 2005




Press  Release



                 Nestle:  Share Buy-Back to Begin in July 2005

                   Sale of Milk Powder Factories in Australia

                             and in the Netherlands



Vevey, 7 June 2005  -  In February 2005 Nestle announced its intention to launch
a share buy-back program of up to one billion Swiss francs in the second half of
the year and the subsequent cancellation of the repurchased shares, assuming
shareholder approval.



The program was announced subject to market conditions and had to take into
account Nestle's commitment to its AAA rating. Nestle now announces the opening
of a second trading line for Nestle shares on virt-x starting 4 July 2005 with
Nestle as the exclusive buyer on this line. A shareholder wishing to sell Nestle
registered shares has the option of selling either via the ordinary trading line
or via the second line. Shares purchased on the second trading line are subject
to the Swiss federal withholding tax rate of 35 percent on the difference
between the repurchase price of the Nestle registered share and its nominal
value of CHF 1.-. This withholding tax can be reclaimed by qualified investors.



The move illustrates Nestle's increased flexibility in managing its capital
structure  as well as the strong financial position of the Group.



Nestle also announces further steps in the implementation of its strategy of
progressive withdrawal from basic commodity processing. In large parts of Latin
America, as well as in several European countries, the Group has already sold
its basic milk powder plants or brought them into a series of joint-venture
operations with Fonterra, the New Zealand-based dairy company.



Now, Nestle Australia also will cease manufacturing milk powder. As a result of
an agreement with Fonterra, Nestle Australia will buy a range of powdered milk
products from Fonterra which will take over the collection of milk from about
420 farmers in Victoria State and acquire the Dennington milk factory. The
transaction will be completed by the end of July 2005. Simultaneously, Nestle
will also restructure its Tongala (Victoria) milk factory, cease its milk powder
production and continue to manufacture only liquid milk products. Both
transactions will result in a number of redundancies and Nestle has committed
itself to provide comprehensive outplacement and advisory services in order to
assist its employees.



In the Netherlands, Nestle's Gorinchem powdered milk factory was acquired by a
Dutch entrepreneur, Mr. Jaap Vreugdenhill, effective 1 June 2005. The factory,
with a workforce of about 140 people, produces milk powder, mainly for export to
the Zone Asia, Oceania and Africa. Over the next years, Nestle will continue to
source part of its semi-finished milk powder requirements for export from the
Gorinchem unit and about 1000 farmers will go on supplying milk to the factory.







     Contacts:       Media:        Francois-Xavier Perroud Tel.: +41-21-924 2596

                     Investors:    Roddy Child-Villiers    Tel.: +41-21-924 3622




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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