A Case study report On Boycotting the baby killers?

Nestle and the ongoing infant formula controversy

Submitted to: Prof. Vivek Raina

Submitted by: Bhaumik Shiroya Harshil Modi Nehal Bhavasar

Submitted date: 11/12/2013

Table of content

1. Introduction..3 1.1. 1.2. Nestle boycott.4 The baby milk issue..4

2. Objective..5 3. Questions answers.6 3.1. Set out the main ethical criticisms of Nestle marketing of infant formula. Which consumer rights are these practices failing to respect? 3.2. Many of the criticisms of Nestls practices stem from the argument that consumers in the developing world are vulnerable. To what extent is this valid argument? 3.3. What are the arguments for and against continuing the Nestle boycott from the point of view of consumers seeking to enhance the well being of mothers and babies in the developing world? What implications does your answer have for notions of consumer sovereignty? 3.4. How would you explain Nestls apparent failure in pacifying its critics? What would you suggest the company do to end the boycott? 4. Reference11

1. Introduction: This case study discuss about the controversy surrounding Nestls marketing of infant formula and in particular looks at how the campaign against Nestls has been sustained over 30 year despite attempts by the company to appease its critics. World largest food company remains mired it means boggy ground, soft mud or dirt in a controversy that seems destined never to go away. The first issue went in public at 1973. Nestle has continued face intense opposition to its practices and has the hesitating or doubting distinction of having endured the worlds longest consumer boycott. In the Nestle infant formula controversy has been extensively discussed business ethics folklore it means that in the organization or company someone do the informally talk about the company or product and which is in a bad manner. For example, Mr. ECO told in meeting that is, I want the product X publishes in the market at Rs. 50000 only. All the manager think in his mind it is not possible and he has just said and this plan executive by us. What is thought in his (Mr. ECO) mind? Is that joke? After this event all the media, publisher, magazine, NGO, WHO and business ethics books seem to include a case on this subject. All this discussion has not able to bring a whole lot of agreement and these are the basis details of the criticism against the company. There were many of the initial problems for Nestle and for that main reason why it has continued to spark hostility it means unfortunately, condition or attitude even though they were knew that all problems. A large number of the express complete the disapproval of and boycott action was initiated against the company during the 1970. In spite of the fact there was much debate about the causal relationships involved, criticisms of such aggressive marketing practices eventually led to the WHO introducing a code of conduct governing the marketing of infant formula in 1981. The story should be end but there were many ways to the beginning but the first boycott of Nestle was effectively called off in 1984. In 1984, boycott coordinators met with Nestle, which agreed to implement the code, and the boycott was officially suspended. In 1988 IBFAN alleged that formula companies were flooding health facilities in the developing world with free and low-cost supplies, and the boycott was re launched the following year. There were many groups initiate further campaigns throughout the 1980, 1990, and 2000 and a result of seek to influence by Nestle is singled government translating the code into legislation. In May 1978, the US Senate held a public hearing into the promotion of breast milk substitutes in developing countries and joined calls for a Marketing Code.

1.1.

Nestle boycott:

A boycott was launched in the United States on July 7, 1977, against the Swiss-based Nestl Corporation. It spread in the United States, and expanded into Europe in the early 1980s. It was prompted by concern about Nestl's "aggressive marketing" of breast milk substitutes, particularly in less economically developed countries (LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of babies, largely among the poor. Among the campaigners, Professor Derek Jelliffe and his wife Patrice, who contributed to establish the World Alliance for Breastfeeding Action (WABA), were particularly instrumental in helping to coordinate the boycott and giving it ample visibility worldwide. 1.2. The baby milk issue:

Groups such as the International Baby Food Action Network (IBFAN) and Save the Children claim that the promotion of infant formula over breastfeeding has led to health problems and deaths among infants in less economically developed countries. There were four problems that can arise when poor mothers in developing countries switch to formula: Formula must normally be mixed with water, which was often contaminated in poor countries, leading to disease in vulnerable infants. Because of the low literacy rates in developing nations, many mothers are not aware of the sanitation methods needed in the preparation of bottles. They were unable to read the language in which sterilization directions are written. Although some mothers can understand the sanitation standards required, they often do not have the means to perform them: fuel to boil water, electric (or other reliable) light to enable sterilisation at night. Mothers in poor countries many try to save money by economizing on the formula by using less than the recommended does or substituting it with other inferior alternatives such as cows milk, rice water or cornstarch with water. Many poor mothers use less formula powder than is necessary, in order to make a container of formula last longer. As a result, some infants receive inadequate nutrition from weak solutions of formula. Advocacy groups and charities have accused Nestle of unethical methods of promoting infant formula over breast milk to poor mothers in developing countries. For example,

IBFAN claim that Nestle distributes free formula samples to hospitals and maternity wards, after leaving the hospital, the formula is no longer free, but because the supplementation has interfered with lactation, the family must continue to buy the formula.

IBFAN also allege that Nestle uses "humanitarian aid" to create markets, does not label its products in a language appropriate to the countries where they were sold, and offers gifts and sponsorship to influence health workers to promote its products.

Advertisements encouraging mothers to adopt modern bottle feeding in place of old-fashioned and inconvenient breastfeeding.

Promotion booklets ignoring or downplaying the benefits of breastfeeding. Incentives to milk nurses and health workers to endorse bottle feeding.

In spite of fact it has admitted is unambiguous in its public pronouncements that breastfeeding is the best for babies. After the aware that campaigners remained new ways of managing the last few years the company has stepped up efforts to develop new way of managing the baby milk issue in 2002, the company introduced an ombudsman system it means a person who investigates and attempts to resolve complaints and problem like between student and university and employee and employer but here refers to company and consumers and government to encourage employee to confidentially report violation of the code without fear of retribution. After independent assessment that declared in 2005 that it had found no systematic shortfalls in terms of Nestls implementation of its instruction on the marketing of breast milk substitute. For that matter one survey has been doing in financial times and PWC since 1998 and boycott has done Nestle little harm pointing out that it was rated worlds 11 most respected companies in 2004. Since 1977 at the time of beginning of boycott, one newspaper report said that Nestls share price has increase by 1.595% as well as Morgan Stanleys European stock index by 1.66%. As per the recent poll revealed that Nestle was one of the worlds most boycott companies and was the number one target for boycott in the U.K but still has a long way to go before it convinces its critics of its ethics. 2. Objectives: Through this case we have an opportunity to examine (in terms of understand) the ethics of marketing practices as well as to discuss the role of ethical consumptions in curbing perceived ethical violations.

3. Questions: Que: 1 Set out the main ethical criticisms of Nestle marketing of infant formula. Which consumer rights are these practices failing to respect? Answer: Nestle is the one of largest food product company in the world, and for marketing their baby food they have ignored so many ethical issues which are also against the consumer rights. This baby food also impacted on the health of the babies and one of the most important things was they were marketing the baby food by replacing the mothers milk which is one of the most important ethical issues. The some of the other main important issues are as follows: Commercializing its product, Nestl was not abiding the rules imposed by the WHO code: the way nestle promoting their product was totally against the rules of the WHO because WTO does not support such kind of activities which impact the health and the health of the babies secondly these kind of practices eventually leads to the WTO to introduce a code of conduct governing the marketing of infant formulas. Nestle, during its marketing operations, is not assumed the moral responsibility for infant mortality caused by low intake of enzymes derived from breast milk: they were just ignoring all the health related issues and factors and promoting their baby food every where even. Nestle promoted aggressively its products, ignoring the benefits of breastfeeding: they promoted the formula by telling that this is the substitute of the breast milk which a mother can give it to their babies, they also communicated that some mothers who found breast feeding as traditional culture and wants to change it so they can use the baby food to feed their babies. Secondly they also promote it by saying that the mother who are HIV/AIDS infected so their babies will also get infected by that so they can use it as substitute because by this their babies will safe form HIV/AIDS. Nestle, with its advertisement, thanks to the illiteracy of poor people, has neglected the value of breastfeeding: they promoted the formula in such places where the mothers are illiterate and ask them to use this baby food they also followed the some other practices to promote the baby food such as: o Free samples to mother o Free supplies to hospitals and clinics o Encouraging mothers to adopt modern bottle feeding in place of old fashioned and inconvenient breastfeeding. o Promotional booklets ignoring the benefits of breastfeeding.
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o Giving money to nurses and health workers to promote bottle feeding instead of breast feeding. All these practices are failing to respect several consumer rights such as: the right to safety people must be protected against dangers in products the right to be informed People has the right to be given all the information they require about a product or service The right to consumer education people have the right to demand education in consumers affairs and the right to satisfaction of basic needs people have the right to basic goods and services which guarantee survival.

Que: 2 Many of the criticisms of Nestls practices stem from the argument that consumers in the developing world are vulnerable. To what extent is this valid argument? Answer: I think that this is absolutely true. In developing countries people, especially the poorest people are more vulnerable than the others because they dont have an education in consumers affairs and in this kind of countries where the poor people dont ha ve such kind of consumer rights and information so the companies have the advantage to promote sell their product in these places. In fact one of the greatest plagues of the countries in the developing world is rampant illiteracy because people are not that much literate and they cannot understand the thinks which are important to know they just simply follows the things which are communicated to them whether it is write or wrong. and it is found that many companies had targeted the such undeveloped and developing countries like countries of Africa, Russia and Asia, and they sold their products and impacted the live of the people, we can say that company like Nestle and a lot of multinational company take advantages by this fact and make the consumer an easy prey to hunt.

Que: 3 What are the arguments for and against continuing the Nestle boycott from the point of view of consumers seeking to enhance the well being of mothers and babies in the developing world? What implications does your answer have for notions of consumer sovereignty? Answer: The some of the arguments to continue the Nestle boycott are as follows: They claim that Nestle is still failing to comply with The International Code of Marketing of Breast milk Substitutes, a code prepared by WHO and UNICEF which, although not legally binding, carries moral and political weight. Nestle has a long-term presence in developing countries and so surely could not survive in business if its marketing of infant formula was harming its customers. Nestle did promote infant formula like any other product, with advertising etc. But it has noticed by the International Code of Marketing of Breast Milk Substitutes since this was adopted in 1981. The dispute with Baby Milk Action and the International Baby Food Action Network (IBFAN) basically comes down to a question of interpretation of the marketing requirements. Nestle have stated publicly that they will meet with Baby Milk Action/IBFAN to try to resolve these differences. The boycott is confrontational and does not advance the issue. Other organizations meet with Nestle on other subjects and progress is made the claim that Nestle kills 1.5 million infants a year has not been substantiated by the World Health Organization. Violations reported by Baby Milk Action/IBFAN will be investigated if sufficient evidence is given and if there is a case these will be stopped. Nestle has appointed internal auditors to ensure Nestls instructions are followed. It has commissioned an external audit to investigate allegations in Pakistan. It also has an ombudsman independent of line managers who staff can report concerns to. Nestle sales represents put pressure upon health professionals in developing countries to advise new mothers to formula feed using their products, Nestle continues to aggressively promote their infant formula in areas of the world where this is a reality. Nestle have been found providing mothers in poor countries with free milk samples that last just long enough to ensure their milk dries up. In developing countries many mothers are forced to mix formula powder with polluted water that they have no means to purify.
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In developing countries many mothers are illiterate and cannot read the instructions on a tin of formula necessary for safe formula feeding.

In developing countries most mothers cannot afford to formula feed and are forced to significantly dilute feeds with water. In these areas good quality nutrition is more important than anywhere. However babies are all too often fed white water to make ends meet. Meanwhile older children suffer nutritionally because what little money they do have is spent on formula instead of food for the family. Nestle systematically violates the WHOs International Code for Marketing Breast milk Substitutes that was put in place to protect babies.

All these were the reasons of boycotts of the Nestle products, but I will say there should be some practices which should be perform by the Nestle they are as follow, Nestle should accept and publish that they are following the International Code and the

subsequent, relevant World Health Assembly Resolutions are minimum requirements for every country. Nestle should give in writing that it will make the required changes to bring its baby food marketing policy and practice into line with the International Code and Resolutions. Some of the other steps which should be taken by the government of countries and organization like WHO and other, they should spread the awareness related to health and live that which the things which are good, secondly they should also stop such kind of practices which are performed by the companies. They should also distribute educational material and some kind of Health camps which can support the interest of the people and their health. Que.4: How would you explain Nestls apparent failure in pacifying its critics? What would you suggest the company do to end the boycott? Answer: For the explanation we have draw the one diagram for the whole situation why nestle were failed in pacifically their critics. In this diagram I have mention why this crisis happened. This particular situation was creating just because of the prior purchase or unawareness about the product in terms of how it is used. In this case there is mentioned that is illiterate women those who are mother to gave their child
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milk without reading instruction which is given on the product by the Nestl. They were failure in pacifying its critics because they knew that thing still they dont take any step for shutout that matter.

Diagram:

Animosity (Hostility)

Efficacy

Boycott participation

Prior Purchase

Consumer ethnocentrism

Product judgement

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We suggest that company to end the boycott is that, first they have to stop those activities which are motivate to increase or taking ahead this crisis. Also they have to find out the participation of the nestle boycott which is mention in above diagram. In that diagram product judgment directly and via prior purchase participation of nestle boycott, so that the Nestls marketing manager has to have taking some step through that consumer came to know about the how this product should use which is not use in reality just because of illiteracy. Step like nestle have start the video advertisement through that consumer come to know how to use. Consumers are unable to read not in show the broadcast in T.V. Nestl of unethical methods of promoting infant formula over breast milk to poor mothers in developing countries. For example, IBFAN (International Baby Food Action Network) claim that Nestl distributes free formula samples to hospitals and maternity wards; after leaving the hospital, the formula is no longer free, but because the supplementation has interfered with lactation, the family must continue to buy the formula. IBFAN also allege that Nestl uses "humanitarian aid" to create markets, does not label its products in a language appropriate to the countries where they are sold, and offers gifts and sponsorship to influence health workers to promote its products. Through those practices they can stop because all are aware about the product to use in a right way. 4. References: 1. http://www.businessinsider.com/nestles-infant-formula-scandal-2012-6?IR=T 2. http://en.wikipedia.org/wiki/Nestl%C3%A9_boycott

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