Nestle prefers investments over payouts: report

FRANKFURT (Reuters) - Nestle <NESN.VX>, the world's biggest food maker, prefers investments over payouts, its CFO told a German paper, adding that recent share buybacks had not limited the group's ability to make acquisitions.

"It is our preference to invest in business -- including M&A transactions, as long as they make sense for the company," Nestle's Chief Financial Officer James Singh told Boersen-Zeitung in an interview published on Saturday.

"At the same time it is our aim to pursue a dividend policy that makes the Nestle share attractive for investors. Our share buyback programmes are part of this long-term strategy."

Nestle aims to conclude its current 10 billion Swiss franc ($10.75 billion) buyback in the first half of the year and will subsequently decide on a new one, Singh said last month.

It was only in June last year that the company completed a 25 billion Swiss franc buyback programme launched in 2007.

Singh told Boersen-Zeitung that the buybacks had not impacted the company's ability to make acquisitions: "If we were planning a big acquisition -- for the benefit of the company -- it would not hinge on the necessary financing."

Singh confirmed rising food prices would boost input costs by 2.5-3 billion Swiss francs in 2011, an estimate given last month along with Nestle's full-year results.

"Our input basket, consisting of raw materials and packing materials, stood at a volume of about 30 billion Swiss francs last year. Simply due to the expected price increases, the basket's volume should rise by 2.5-3 billion Swiss francs this year."

(Reporting by Christoph Steitz; editing by Keiron Henderson)