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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Summarize the unethical case (show a clear chronology and company response)

Within this essay, we shall investigate and analyze the ethical and moral dilemma created by the large food and goods conglomerate Nestlé, who extensively marketed infant formula to lower-income mothers and parents in emerging economies, from the 1970s till today.

And its strategies come from the very top of the company (see below for how Nestlé's Chairman responds when I raise violations with him directly). Despite its response, Nestlé will continue to promote its formula with the claim it “protects” babies, for example, though executives know that babies fed on formula are more likely to become sick than breastfed babies and, in conditions of poverty, more likely to die. It will continue targeting health workers with gifts and sponsorship to endorse its products. And it will continue making contact with pregnant women and new mothers and advertise baby milk brands.

Why was the US boycott dropped?

In 1981 the World Health Organization (WHO) adopted a set of recommendations for member states to regulate the marketing of breast milk substitutes, feeding bottles and teats. This is known as the ‘WHO Code (pdf, 128Kb)'. Read more about the Code.

Many developing countries didn't fully implement the Code. So, in 1982, we became the first manufacturer to introduce our own policy, drawn from the WHO Code, to regulate how we marketed breast milk substitutes in developing countries. We refined this policy in 1984, after consultations with stakeholders including the WHO, the United Nations Children's Fund (UNICEF) and civil society organizations.

As a result of this, the US boycott against us was dropped.

We strive to continuously improve our practices and we have revised and reinforced our policy (pdf, 1.67Mb) a number of times since its adoption, based on practical experience and developments in WHO recommendations.

Are there still boycott activities today?

Yes. In 1988, a group of organisations in the United Kingdom launched a new boycott against us, which is on-going, despite the fact that we follow the WHO Code as implemented by national governments everywhere in the world.

As a result of our inclusion in the responsible investment index FTSE4Good in 2011, the United Reformed Churches ended their support for the boycott. A number of other significant stakeholders had already ended their support for it, including the General Synod of the Church of England, the Royal College of Midwives, and the Methodist Ethical Investment Committee. Read more about FTSE4Good.

Company response

Nestlé's response simply ignores these violations – because it fully intends to continue with them. I've checked the Nestlé Hong Kong website just now, and Nestlé continues to promote Nan HA with its bogus “OPTI PRO” and “protect plus” claims.

In its response, Nestlé instead focusses on a few cases where it says the promotion was by a retailer, denying responsibility. Yet the complaint in IBFAN's report in the case of India, for example, was: ‘In India, an online store uses Nestlé product information on their virtual shopping shelf.'

The retailer is quoting Nestlé's own idealising claims: ‘For Lactogen 1: “protein which is easier to digest”; “nutrients that support growth and brain development”; “essential fatty acids LA, ALA and Choline contribute to the structural building blocks of the brain”; “iron and iodine help in brain development and vitamin A for healthy vision.”‘

These imply benefits to the formula and so undermine breastfeeding – and they are Nestlé's responsibility.

Nestlé has nothing to say about the sponsorship of health workers exposed in the Breaking the Rules 2014 report, such as at the 4th World Congress of Pediatric Gastroenterology, Hepatology and Nutrition in Taiwan (left).

Besides, Nestlé's also response that their critics should focus on doing something to improve unsafe water supplies, which contributed to the health problems associated with bottle feeding. They also later used this approach to promote their bottled water. As The Guardian puts it, “its huge marketing budgets clearly influence peoples' behaviour, even if direct causality can't be demonstrated.”

Today, several countries and organizations are still boycotting Nestle, despite their claims to be in compliance with WHO regulations. There's even a committee, the International Nestlé Boycott Committee that monitors their practices. Several universities and student organizations have also joined the boycott, especially in the UK.

There is no clear, public number of lives that were lost due to this aggressive marketing campaign, and of course, Nestle is not directly responsible for their tragedies. But it was easy for them, as it was easy for everybody to see the risks and the negative effects their formula was having. It was easy for them to save many lives, but they chose the money instead. Profits before children – check.

What did the case owner do wrongly? What are the reason that cause the case? (be specify with evidence/example; How does it happen? Any accomplice?

Child labor, unethical promotion, manipulating uneducated mothers, pollution, price fixing and mislabeling – those are not words you want to see associated with your company. Nestle is the world's largest foodstuff company, and it has a history that would make even hardcore industrialists shiver. We're gonna look at why Nestle has such a bad reputation and whether or not it deserves it.

We're in the '90s, and this is a sad story about poverty, breastfeeding, and greed. Nestle aggressively pushed their breastfeeding formula in less economically developed countries (LEDCs), specifically targeting the poor. They made it seem that their infant formula was almost as good as a mother's milk, which is highly unethical for several reasons.

The first problem was the need for water sanitation. Most of the groups they were targeting – especially in Africa – didn't have access to clean water (many don't to this day), so it was necessary for them to boil the water. But due to low literacy rates, many mothers were not aware of this, so they mixed the formula with polluted water which put the children at great risks. Nestle seems to have knowingly ignored this and encouraged mothers to use the formula even when they knew the risks. Breastfeeding, one of the most important aspects for an infant, especially in unsanitized areas, was cast aside. Baby formula was “the nearest thing in the world”, and this “splendid triumph of care and science” is “so like mother's milk that the tiny stomach won't notice the difference”. But the tiny stomach did notice the difference.

Many mothers were able to read in their native language but were still unable to read the language in which sterilization directions were written. Even if mothers understood the need to boil the water, they might not have had the facilities to do so. UNICEF estimates that a formula-fed child living in disease-ridden and unhygienic conditions is between 6 and 25 times more likely to die of diarrhea and four times more likely to die of pneumonia than a breastfed child. Another problem was that mothers tended to use less formula than needed – to make the jar last longer, resulting in many infants receiving inadequate amounts.

But even if the water was boiled, and even if the formula was administered in the right proportion and in the right quantity, it is lacking in many of the nutrients and antibodies that breast milk provides. Breast milk contains the required amount of the nutrients essential for neuronal (brain and nerve) development, and to some extent, protects the baby from many diseases and potential infections. According to the International Baby Food Action Network (IBFAN), Nestle used unethical methods to promote their infant formula to poor mothers in developing countries. But it gets even worse.

Who discover it?

The Swiss multinational Nestlé has been accused of violating ethical marketing codes and manipulating customers with misleading nutritional claims about its baby milk formulas.

A new report by the Changing Markets Foundation has found that Nestlé marketed its infant milk formulas as “closest to”, “inspired by” and “following the example of” human breastmilk in several countries, despite a prohibition by the UN's World Health Organisation (WHO).

The study, which analysed over 70 Nestlé baby milk products in 40 countries, also found that Nestlé often ignored its own nutritional advice in its advertising.

In South Africa, the firm used sucrose in infant milk formulas, while marketing its Brazilian and Hong Kong formulas as being free of sucrose “for baby's good health”.

In Hong Kong, it promoted its baby milk powders as healthier – because they were free from vanilla flavourings – even as it sold other vanilla-flavoured formulas elsewhere in the territory.

How does it discover?

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