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1、CASE: NESTLE- THE INFANT FORMULA CONTROVERSYNestle Alimentana of Vevey, Switzerland, one of the worlds largest food-processing companies with worldwide sales of over $8 billion, has been the subject of an international boycott. Forever 20 years, beginning with a Pan American Health Organization alle

2、gation, Nestle has been directly or indirectly charged with involvement in the death of Third World infants. The charges revolve around the sale of infant feeding formula, which allegedly is the cause for mass deaths of babies in the Third World.In 1974 a British journalist published a report that s

3、uggested that powdered-formula manufacturers contributed to the death of Third World infant by hard-selling their products to people incapable of using them properly. The pamphlet was entitled “Nestle Kills Babies, and accused Nestle of unethical and immoral behavior.CONCERNED ISSUE:There are severa

4、l companies that market infant baby formula internationally; Nestle received most of the attention. This incident raises several issues important to all multinational companies. Before addressing these issues, lets look more closely at the charges by the infant formula Action Coalition and others an

5、d the defense by Nestle.Most of the charges against infant formulas focus on the issue of whether advertising and marketing of such products have discouraged breast feeding among Third World mothers and have led to misuse of the products, thus contributing to infant malnutrition and death. Following

6、 are some of the charges made: A Peruvian nurse reported that formula had found its way to Amazon tribes deep in the jungles of northern Peru. There, where the only water comes from a highly contaminated river-which also serves as the local laundry and toilet- formula -fed babies came down with recu

7、rring attacks of diarrhea and vomiting. Throughout the Third World, many parents dilute the formula to stretch their supply. Some even believe the bottle itself has nutrient qualities and merely fill it with water. The result is extreme malnutrition. In rural Mexico, the Philippines, Central America

8、, and the whole of Africa, there has been a dramatic decrease in the incidence of breast feeding. Critics blame the decline largely 600 on the intensive advertising and promotion of infant formula. Clever radio jingles extol the wonders of the white mans powder that will make baby grow and glow. Mil

9、k nurses visit nursing mothers in hospitals and their homes and provide samples of formula. These activities encourage mothers to give up breast feeding and resort to bottle feeding because it is the fashionable thing to do or because people are putting it to them that this is the thing to do.The fo

10、llowing points are made in defense of the marketing of baby formula in Third World countries: Nestle argues that the company has never advocated bottle feeding instead of breast feeding. All its products carry a statement that breast feeding is best. The company states that it believes that breast m

11、ilk is the best food for Infant and encourages breast feeding around the world as it has done for decades. The company offers as support of this statement one of Nestls oldest educational booklets on “infant Feeding and Hygiene, which dates from 1913 and encourages breast feeding. However, the compa

12、ny does believe that infant formula has a vital role in proper infant nutrition as a supplement, when the infant needs nutritionally adequate and appropriate foods in addition to breast milk and as a substitute for breast milk when a mother cannot or chooses not to breast feed. Mothers in developing

13、 nations often have dietary deficiencies. In the Philippines, a mother in a poor family who is nursing a child produces about a pint of milk daily. Mothers in the United States usually produce about a quart of milk each day. For both the Filipino and U.S. mothers, the milk produced is equally nutrit

14、ious. The problem is that there is less of it for the Filipino baby. If the Filipino mother doesnt augment the childs diet, malnutrition develops. Many poor women in the Third World bottle feed because their work schedules in fields or factories will not permit breast feeding. The infant feeding con

15、troversy has largely to do with the gradual introduction of weaning foods during the period between three months and two years. The average well-nourished Western woman, weighing 20 to 30 pounds more than most women in less-developed countries, cannot feed only breast milk beyond five or six months.

16、 The claim that Third World women can breast feed exclusively for one or two years and have healthy, well-developed children is outrageous. Thus, all children beyond the ages of five to six months require supplemental feeding. The real nutritional problem in the Third World is not whether to give in

17、fant breast milk or formula, but how to supplement mothers milk with nutritionally adequate foods when they are needed. Finding adequate locally produced, nutritionally sound supplements to mothers milk and teaching people how to prepare and use them safely are the issues. Only effective nutrition e

18、ducation along with improved sanitation and good food that people can afford will win the fight against dietary deficiencies in the Third World.THE RESOLUTION SUPPORTED BY NESTLE In 1974, Nestle, aware of changing social patterns in the developing world and the increased access to radio and televisi

19、on there, reviewed its marketing practices on a region-by-region basis. As a result, mass media advertising of infant formula began to be phased out immediately uncertain markets and, by 1978, was banned world Wide by the company. Nestle then undertook to carry out more comprehensive health educatio

20、n programs to ensure that an understanding of the proper use of their products reached mothers, particularly in rural areas. “Nestle fully supports the WHO World Health Organization Code. Nestle will continue to promote breast feeding and ensure that its marketing practices do not discourage breast

21、feeding anywhere. Our company intends to maintain a constructive dialogue with governments and health professionals in all the countries it serves with the sole purpose of servicing mothers and the health of babies. In 1977, the infant formula Action Coalition (INFACT, successor to the Third World I

22、nstitute), along with 601 several other world organizations, successfully lobbied the World Health Organization to draft a code to regulate the advertising and marketing of infant formula in the Third World. In May 1981 Nestle announced it would support the code and waited for individual countries t

23、o pass national codes that would then be put into effect. Unfortunately, very few such codes were forthcoming. By the end of 1983, only 25 of the 157member nations of the WHO had established national codes. Accordingly,In addition, in May 1982 Nestle formed the Nestle infant formula Audit Commission

24、 (NIFAC), chaired by former Senator Edmund 1.Muskie, and asked the commission to review the companys instructions to field personnel to determine if they could be improved to better implement the code. At the same time, Nestle continued its meetings with WHO and UNICEF (United Nations Childrens Fund

25、) to try to obtain the most accurate interpretation of the code. NIFAC recommended several clarifications for the instructions that it believed would better interpret ambiguous areas of the code; in October 1982, Nestle accepted those recommendations and issued revised instructions to field personne

26、l.Meetings with UNICEF in early 1984 finally led to a joint statement by Nestle and INBC on January 25. At that time, INBC announced its suspension of boycott activities, and Nestle pledged its continued support of the WHO code.The company has a strong record of progress and support in implementing

27、the WHO code, including the following: Immediate support for the WHO code, May 1981, and testimony to this effect before the U.S. Congress, June 1981.Issuance of instructions to all employees, agents, and distributors in February 1982to implement the code in all Third World countries where Nestle ma

28、rkets infant formula. Issuance of revised instructions to Nestle personnel, October 1982, as recommended by the Muskie committee to clarify and give further effect to the code. Consultation with WHO, UNICEF, and NIFAC on how to interpret the code and how best to implement specificProvisions, includi

29、ng clarification by WHO/UNICEF of the definition of children who need to be fed breast milk substitutes, to aid in determining the need for supplies in hospitals.NESTLE POLICIES:In the early 1970s Nestle began to review its infant formula marketing practices on a region-by-region basis. By 1978the c

30、ompany had stopped all consumer advertising and direct sampling to mothers. Instructions to the field issued in February 1982 and clarified in the revised instructions of October 1982to adopt articles of the WHO code as Nestle policy include the following:. No advertising to the general public No sa

31、mpling to mothers No mother craft workers No use of commission/bonus for sales No use of infant pictures on labels No point-of-sale advertising No financial or material inducements to promote products No samples to physicians except in three specific situations: a new product, a new product formulat

32、ion, or a new graduate physician; limited to one or two cans of product Limitation of supplies to those requested in writing and fulfilling genuine needs for breast milk substitutes A statement of the superiority of breast feeding on all labels/materialsEven though Nestle stopped consumer advertisin

33、g, it was able to maintain its share of the Third World infant formula market. In 1988a call to resume the seven-year boycott was made by a group of consumer activist members of the Action for corporate Accountability. The group claimed that Nestle was distributing free formula through maternity war

34、ds as a promotional tactic that undermined the practice of breast feeding. The group claimed that Nestle and others, including American Home Products, have continued to dump formula in hospitals and maternity wards and that, as a result, babies are dying as the companies are violating the WHO resolu

35、tion. As late as 1997 the Interagency Group on Breastfeeding Monitoring (lGBM) claimed Nestle continues to systematically violate the WHO code. The boycott focus is Tasters Choice Instant Coffee, Coffee-mate Nondairy Coffee Creamer, Anacin aspirin, and Advil.Representatives of Nestle and American Ho

36、me Products rejected the accusations and said they were complying with World Health Organization and individual national codes on the subject.THE NEW TWISTS:A new environmental factor has made the entire case more complex: As of 2001 it was believed that some 3.8 million children around the world ha

37、d contracted the human immunodeficiency virus (HIV) at their mothers breasts. In affluent countries mothers can be told to bottle feed their children. However, 90 percent of the child infections occur in developing countries. There the problems of bottle feeding remain. Further, in even the most inf

38、ected areas,70 percent of the mothers do not carry the virus, and breast feeding is by far the best option. The vast majority of pregnant women in developing countries have no idea whether they are infected or not. One concern is that large numbers of healthy women will switch to the bottle just to

39、be safe. Alternatively, if bottle feeding becomes a badge of HIV infection, mothers may continue breast feeding just to avoid being stigmatized. In Thailand, pregnant women are offered testing, and if found HIV positive, are given free milk powder. But in some African countries, where women get preg

40、nant at three times the Thai rate and HIV infection rates are 25 percent compared with the 2 percent in Thailand, that solutions much less feasible. Moreover, the latest medical evidence indicates that extending breastfeeding reduces the risk of breast cancer. Most recently the demand for infant for

41、mula in South Africa has outstripped supply as HIV-infected mothers make the switch to formula. Demand grew 20 percent in 2004 and the government is investigating the shortages as Nestle scrambles to catch up with demand. The firm reopened a shuttered factory and began importing formula from Brazil.

42、CONCERNED PROBLEMS:1. What are the responsibilities of companies in this or similar situations?2. What could Nestle have done to have avoided the accusations of killing Third World babies and still market its product?3. After Nestles experience, how do you suggest it, or any other company, can prote

43、ct itself in the future?4. Assume you are the one who had to make the final decision on whether or not to promote and market Nestles baby formula in Third World countries. Read the section titled Ethical and Socially Responsible Decisions in Chapter 5 (pp. 148-149) as a guide to examine the social r

44、esponsibility and ethical issues regarding the marketing approach and the promotion used. Were the decisions socially responsible? Were they ethical?5. What advice would you give to Nestle now in light of the new problem of HIV infection being spread via mothers milk?1. What are the responsibilities

45、 of companies in this or similar situations?Answer: Nestle supports the WHO (World Health Organization) Code. Nestle will continue to promote breast feeding and ensure that its marketing practices do not discourage breast feeding any - where. The company intends to maintain a constructive dialogue w

46、ith governments and health professionals in all the countries it serves with the sole purpose of servicing mothers and the health of babies. We aim to use all our expertise and experience in manufacturing to create a sustainable future locally, nationally and globally. The responsibilities of Nestle

47、 in this or similar situations are given bellow a) Responsible to follow the company policyAs nestle product is subject to an international boycott because its sensitive infant formula, so we should be more responsible to maintain these policies v No advertising to the general publicv No sampling to

48、 mothersv No use of commission/bonus for salesv No use of infant pictures on labelsv No point-of-sale advertisingv No financial or material inducements to promote productsv No samples to physicians except in three specific situations: a new product, a new product formulation, or a new graduate physi

49、cian; limited to one or two cans of productv Limitation of supplies to those requested in writing and fulfilling genuine needs for breast milk substitutesv A statement of the superiority of breast feeding on all labels/materialsv Labels and educational materials clearly stating the hazards involved in incorrect usage of infant formula