Lord Coe has accused Nestle of hypocrisy following its decision to withdraw sponsorship from the IAAF Kids' Athletics programme.
Swiss-based Nestle said on Wednesday it was concerned its own reputation could be damaged by association, owing to doping and corruption scandals involving athletics' world governing body, and that it would be immediately withdrawing its financial backing.
Nestle had been supporting the IAAF Kids' Athletics programme, being its main sponsor since agreeing a five-year deal that took effect in January 2012, and had just entered its last year.
It is understood to have been paying around $1 million [£690,000] per year, but has asked the IAAF to immediately remove all Nestle branding from its website.
IAAF president Coe on Thursday pointed to Nestle's backing of the Tour de France during a time when cycling had notable doping problems.
"We were left confused and angry. I didn't understand the rationale behind it," he told BBC Sport.
"Clearly it wasn't a decision made about reputation because, since 2001, they've been the global partner to the Tour de France, and renewed at a moment when cycling was in its worst position around doping. We felt this was hypocritical."
In a statement published on Wednesday, Coe had said: "Angered and dismayed by today's kids' athletics announcement. We will not accept it. It's the kids who will suffer."
Nestle's move came as a new setback to the governing body and Coe, who was elected as president last August and has since seen the reputation of the IAAF suffer repeated blows. The IAAF was understood to be preparing a legal challenge.
Nestle said in its statement on Wednesday: "We have decided to end our partnership with the IAAF Kids' Athletics programme with immediate effect. This decision was taken in light of negative publicity associated with allegations of corruption and doping in sport made against the IAAF.
"We believe this could negatively impact our reputation and image and will therefore terminate our existing agreement with the IAAF, established in 2012. We have informed the IAAF of our decision."
The news that Nestle has terminated its sponsorship follows last month's reports that sportswear giant and IAAF partner adidas was "looking into its options" regarding its support of the athletics authority, with a spokesperson saying adidas wanted further information about the organisation's reform process.
Athletics is reeling from two damning reports by the World Anti-Doping Agency's (WADA) independent commission, which revealed ''state-sponsored'' doping in Russia and raised questions about widespread doping in other countries.
Life bans for blackmailing athletes and covering up positive drugs tests were last month handed to Papa Massata Diack, who is the son of former IAAF president Lamine Diack and was a marketing consultant for the organisation, together with former Russian athletics federation (ARAF) president and IAAF treasurer Valentin Balakhnichev, and Alexei Melnikov, a senior ARAF coach.
All three have appealed against the sanctions to the Court of Arbitration for Sport.