Nestlé, Unilever and Danone are set to report slower third-quarter sales growth

After a strong performance in 2009, Europe's biggest food groups are set to report slower third-quarter sales growth as they put up prices to offset commodity price rises.

Analysts expect Q3 like-for-like sales growth of 5.8 percent according to a survey of analysts conducted by the company and see 6.4 percent for the full year. They say Danone will be able to cope with 10 percent higher milk costs that it sees for 2010 by raising its own prices and also through productivity gains.

Europe's top three of Nestle AG, Unilever Plc/NV and Danone SA will see higher costs feeding through for products like milk as they struggle with weak consumer demand and tough competitive pressures.

Danone, the world's largest yoghurt maker, cut its dairy prices in mid-2009 to stimulate demand and the resulting strong growth seen in late 2009 will give tough comparisons to match, while Nestle and Unilever also saw strong growth in late 2009.