...BRIEF HISTORY Nestle Alimentana, Vevey, Switzerland, the world’s largest food processing company is the subject of controversy and international boycott for allegedly causing mass deaths of babies in the third world all because of their irresponsible advertising approach and marketing activities. To appreciate better the problem here are some of the significant events of the controversy. * 1974- British journalist published a report that suggested that powdered formula manufacturers contributed to the death of third world infants by hard-selling their products to people incapable of using them properly. * Nestle immediately banned its infant formula advertisement in some markets. * 1977- Interfaith Center on Corporate Responsibility in New York compiled a case against formula feeding in developing nations, and the Third World Institute launched a boycott against many Nestle products. * 1978- Nestle implements total advertisement ban worldwide. * 1981- World Health Organization drafts a CODE to regulate advertising and marketing of infant formula. * May 1981- Nestle announces it would support the Code. * February 1982- Nestle issued to Marketing personnel to follow the Code to their best understanding. * May 1982- Nestle formed Nestle Infant Formula Audit Commission (NIFAC) to review the company’s instruction to field personnel to determine if they could be improved to better implement the Code. * October 1982- Nestle accepted NIFAC recommendation...
Words: 1009 - Pages: 5
...For more than 20 years, Nestle Alimentana of Vevey Switzerland, one of the world’s largest food-processing companies, has been the focus of an international boycott involving the death of Third World Infants as a result of their unethical advertising, marketing and sale of infant feeding formula to incapable mothers. In this case, Nestle was accused of hard-selling their products to mothers in Third World countries who were incapable of the proper use of the products, and encouraging them to use powdered milk formulas as a substitute for breastfeeding. As a result, the increased use of the product caused malnutrition and mass deaths of babies in developing countries. The controversy began to arise in the 1960’s when breastfeeding rates rapidly declined as infant food companies began to expand their markets into developed countries. Nestle was first charged with the allegations by the Pan American Health Organization, beginning the start of this ongoing, international boycott. Then in 1974, a 28-page report published by the Third World Working Group called “Nestle Kills Babies,” suggested that because of their unethical and immoral selling practices, Nestle was a major contributor to the death of Third World infants. Because of these allegations, the Infant Formula Coalition charged Nestle on multiple allegations. Many of the charges that Nestle faced revolved around the fact that their advertising and promotion tactics for infant formula discouraged breast feeding and encouraged...
Words: 307 - Pages: 2
...NESTLE-THE INFANT FORMULA CONTROVERSY CASE BRIEF For over 20 years, Nestlé has been directly and indirectly charged with involvement in the death of Third World infants Most of the charges alleged due to discouraging breast feeding among Third World mothers Misuse of the products, thus contributing to infant malnutrition and death Nestle sought clarifications from UNICEF and WHO so as to identify the immaculate measures THE RESPONSIBILITIES Be involved in baby friendly campaigns Create breast feeding awareness Create awareness pertaining to usage instructions for the formula Continue their efforts on social responsibility Reposition themselves in the market Reduce pushing sales through channels like hospitals Have a cut on giving free samples ACCUSATION AVOIDANCE Understand the country’s culture Support breastfeeding and its benefits Encourage using formula for special situations only Analyse health hazards and implications of the formula A STEP FOR THE FUTURE Understand tradition, life style, economic status, natural conditions of the host country Conduct studies about the possible medical implications Involve in morality rather than bottom line increase DECISION TO MARKET THE RD FORMULA IN 3 WORLD COUNTRIES Marketing techniques used: Free samples given Mass marketing to general public Nearly all of these advertisements depicted healthy white babies being fed by the formula. Pushing sales through hospitals and maternity wards by dumping the formula...
Words: 342 - Pages: 2
...RUNNING HEAD: Nestlé: The Infant Formula Controversy Nestlé: The Infant Formula Controversy CASE 4 April VanRivers Adv. International Marketing March 24, 2013 1. What are the responsibilities of companies in this or similar situations? Domestic companies and multinational companies have responsibilities that portray their corporate and social stance as an organization. Many of these responsibilities are indicated in the vision or mission statement. Ethical and socially responsible conduct should be the cornerstone of any organization’s core values and strategic management process (Godiwalla & Damanpour, 2006). For an MNC, ethical and social responsibility charge becomes an imperative because it is globally conspicuous, and, its activities have global impact and ramifications (Godiwalla & Damanpour, 2006). An MNC’s activities whether they are the pursuit of rapid growth, increased market share and profits, and competitive performance, should emanate its core ethical values and socially responsible vision. A MNC’s responsibility should stem beyond financial targets and in addition focus on the well being of people, communities and the environment. A company that has a strong social responsibility statement is Diageo. Diageo is one of the top ten MNCs and is the world's largest producer of spirits and a major producer of beer and wine (SiliconIndia, 2012). Diageo's brands include Smirnoff, Johnnie Walker, Baileys and Guinness (SiliconIndia, 2012). It is...
Words: 1637 - Pages: 7
...Case 1 Nestle: The Infant Formula Controversy Background Nestle, among other companies that market infant formulas, has been the focus of attack from different groups. The source of this controversy sprang from the number of deaths of babies from Third World countries that are alleged to have been the result of aggressive advertising of the Nestle infant formula. Nestle stands by its position that it has been responsible in its product marketing stressing, among other things, that (1) it has never advocated bottle feeding instead of breast feeding and (2) that the infant formula has a vital role in proper infant nutrition as a supplement. Nevertheless, Nestle adopted measures to address the concerns of different groups, like WHO, by discontinuing its mass media advertising of infant formula, carrying out comprehensive health education programs, and supported the WHO code. By late 1990s, Nestle was again accused of continuously violating the WHO code and concerned groups have called for the boycott of Nestle products. By 2001, the HIV crisis in certain parts of the world, like South Africa, has caused a shift in preference from breast feeding to infant formula. Consequently, Nestle faces the challenge of addressing such high demand. Finally, Nestle, as an MNC, carries new responsibilities that comes along with marketing its products like participating in the fight against HIV and AIDS especially in developing countries. Problem Statement Taking into account the social...
Words: 4607 - Pages: 19
...Bhopal) is Nestle´ S.A., the Swiss food conglomerate. Of all the business histories examined by students of ethics, Nestle´’s saga of controversy is perhaps one of most intriguing. In the late 1960s, Nestle´ was criticized by social activists for its marketing of powdered milk formula for infants in less developed countries. The case became a cause ce´le`bre as Nestle´ became the victim of a well-organized boycott campaign. The conflict has become a popular case study in the business school curriculum because it demonstrates the need that companies have to constantly preserve and enhance their legitimacy in the public eye. The discussion of legitimacy leads quite naturally into a discussion of issue management, and the consequences of mismanaging a public issue (Post 1985 p. 127). Although Nestle´ was the subject of the boycott, the infant formula controversy may have initially been seen more as a dispute over generic bad practices within the infant formula industry rather than as a focused attack on one particular firm, a perspective that Nestle´ itself may have wanted to engineer. The original publication that stimulated the boycott refers to an industry-wide pattern of marketing of infant formula. (Muller 1974) To begin with Nestle´ was illustrative of an overall malaise, and it is conceivable that if it had not been the industry market leader then social activists might have initially focused their attacks on an alternative firm in the industry. Nestle´ was ‘‘the...
Words: 1215 - Pages: 5
...| Ethics Paper Nestlé Infant Formula Prepared by Mohammad Ul Haque Id:0147217 MG660- Strategic Marketing Prepared for Professor Jorge Zavala-Vinces 1. If you had been an executive with Nestlé, would you have changed your marketing approach after the boycotts began? Nestlé’s marketing tactics in promoting the use of infant formula in Third World countries wasn’t moral. Nestlé was not acting within the boundaries of moral standards. Every corporation must understand and realize the corporate ethics and responsibilities they should have. The problem was that Nestlé used unqualified sales girls, the distribution of free samples, marketed to people who were incapable to fulfil the minimum requirements for giving formula safely to the baby, and the association of bottle-feeding with healthy babies to promote the use of infant formula to mothers who would have been better off breast-feeding their babies. The first Nestlé boycott in 1977 led by Infant Formula Action Coalition (INFACT) had a large impact on Nestlé’s revenues. Their products were boycotted in the U.S. to end the promotion of infant formula. This was a small part of the major problem which is to improve total infant nutrition throughout the Third World that must be resolved on a global basis if the health of babies in the developing nations is to be improved. If I had been an executive with Nestlé, I would have changed the marketing approach after the boycotts began...
Words: 2507 - Pages: 11
...Contents Introduction 2 Ethical Behaviour and Theories 2 Ethical Codes 3 Ethical Dilemmas of Nestle 3 Infant Formula: 3 Overcharged Prices 4 Unfair Labour Practices 4 Steps Taken by Nestle 5 Conclusion 5 References 7 Introduction Marketing ethics can be considered as a subset of business ethics which deals with the study of how ethical and moral standards can be applied to various marketing decisions. Various topics can come under the umbrella of marketing ethics and these are product safety, pricing fairness, advertising honesty, product liability, etc. Corporations have increasingly become very competitive and in the last few years, news of breach of ethical codes of conduct have been highlighted in the media (Boone & Kurtz, 2011). This essay will elaborate upon the marketing dilemmas through the lens of ethics using case example of Nestle. Ethical Behaviour and Theories One of the ways through which moral philosophy and ethics can be viewed is through utilitarianism as proposed by John Stuart Mill who argued that the world exists in an imperfect state and individuals should strive to maximize happiness and stated that any increase in the degree of happiness justified any kind of sacrifice (Fritzsche & Oz, 2007). On the other hand, Kant states that the connection between happiness and virtue arose because of the belief that the rational pursuit of virtue and happiness are same in that they are identical wherein virtue can produce happiness...
Words: 1968 - Pages: 8
...Journal of Business Strategy THE NESTLE BOYCOTT: IMPLICATIONS FOR STRATEGIC BUSINESS PLANNING Rafael D. Pagan, Jr. Article information: To cite this document: Rafael D. Pagan, Jr., (1986),"THE NESTLE BOYCOTT: IMPLICATIONS FOR STRATEGIC BUSINESS PLANNING", Journal of Business Strategy, Vol. 6 Iss 4 pp. 12 - 18 Permanent link to this document: http://dx.doi.org/10.1108/eb039126 Downloaded on: 10 January 2015, At: 02:12 (PT) References: this document contains references to 0 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 1761 times since 2006* Users who downloaded this article also downloaded: Downloaded by UNIVERSITY OF HUDDERSFIELD At 02:12 10 January 2015 (PT) N. Craig Smith, (1987),"Consumer Boycotts and Consumer Sovereignty", European Journal of Marketing, Vol. 21 Iss 5 pp. 7-19 http://dx.doi.org/10.1108/EUM0000000004694 N. Craig Smith, (1989),"Consumer Boycotts", Management Decision, Vol. 27 Iss 6 pp. - http://dx.doi.org/10.1108/ EUM0000000000050 Edmund S. Muskie, Daniel J. Greenwald, (1986),"THE NESTLE INFANT FORMULA AUDIT COMMISSION AS A MODEL", Journal of Business Strategy, Vol. 6 Iss 4 pp. 19-23 http://dx.doi.org/10.1108/eb039127 Access to this document was granted through an Emerald subscription provided by 422267 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose...
Words: 4361 - Pages: 18
...While researching topics for this project I was directed to the www.brighthub.com website which had an article titled “Real-World Examples of Bad Business Ethics”. The article provided brief descriptions of alleged, unethical business decisions made by McDonald’s, Mattel, Nestlé, Wal-Mart and Citibank. This paper will focus on Nestlé’s unethical marketing of artificial baby milk. The unethical practices of promoting infant formula to new mothers in developing countries was first presented in 1966 in a pamphlet by Dr. Derrick B. Jelliffe titled Child Nutrition in Developing Countries. Dr. Jelliffe, an expert in child nutrition and Director of the Caribbean Food and Nutrition Institute, published the pamphlet in an effort to call attention to the dangers of bottle feeding in traditional and semi-sophisticated populations. From 1966 to 1972, Dr. Jelliffe advocated for restraint on the part of infant formula companies and suggested that government, industry and physicians work together for the health of infants (Newton). It was in 1973 though that the infant formula controversy became public when an article titled “Babies Mean Business” was published in the New Internationalist magazine. The article outlined several unethical marketing practices that manufacturers were engaged in in an effort to promote breast milk substitute to new mothers, doctors and hospitals. One of these practices involved uniformed milk nurses, who were paid a commission by the manufacturer, to distribute...
Words: 1064 - Pages: 5
...Introduction Nestlé, founded in 1866 by Henri Nestlé, is the world’s largest food company, producing products such as chocolates, soups, coffee, cereals, baby formula, and a host of other items (Nestlé, 2006). In the late 1960’s and 1970’s, Nestlé found itself in the centre of a scandal (Krasny, 2012). It was accused of encouraging mothers in Asia, Africa, and Latin America to use baby formula instead of breast milk, a healthier and less expensive alternative (Krasny, 2012). The allegations of non-ethical marketing practices led to boycotts of Nestlé products, beginning in 1977, in the United States and Europe: some boycotts continue to this day (Facebook, 2012). The criticisms, public outcry, and attention from social activists resulted in Senate Hearings in the United States and meetings by the World Health Organization (WHO, 1981). The result was a new set of marketing rules, introduced in 1981,that restricted the promotion of baby formula (WHO, 1981). These restrictions are outlined in the International Code of Marketing of Breast-Milk Substitutes (WHO, 1981). The aim of the code is to “ensure the proper use of breast milk substitutes, when these are necessary, on the basis of adequate information and through appropriate marketing and distribution” (International Lactation Consultant Association, 2001). When you consider the corporate marketing practices uncovered in the Nestlé scandal, one can see that a corporation’s vision must go beyond profits, and consider...
Words: 3303 - Pages: 14
...Case Study: Nestlé - The Infant Formula Controversy Main issue: The bad reputation of Nestlé among the developing countries because the company has been charged with involvement in the death of infants. Solution: In the article, I think the company tried hard to meet the regulations of WHO and they did change their strategies because of the misleading information it gave. However, it seems that there are still a long way before Nestlé can get rid of the bad reputation. I suggest the company keeps working on the programs that help the people in developing countries understand the differences between using the infant feeding formula and the breast feeding. Additionally, Nestlé can deliver the programs which teach people the importance of the clean water in developing countries. Implement: Using different strategies in different countries is really important. In the developed countries, the company can continually promote its infant feeding formula with the slogan such as "Breast feeding is the best." in the advertisements since the people are aware of the importance of breast feeding. In developing countries, Nestlé can have some trained salespeople in the stores which sale its products to help the mothers understand what is the best for their children now and how to feed their with the milk powder. Moreover, the company can set up the conspicuous signboard showing that the breast feeding and clean water are important to the infants. Though it can affect the sales of the products...
Words: 253 - Pages: 2
...Case Study Report: Nestle: The Infant Formula Controversy Beginning in the early 1970’s Nestle Alimentana of Vevey, Switzerland, one of the world’s largest food-processing companies was at war with the world. Nestle was under fire from the Pan American Health Organization for allegations of the mass amount of deaths amongst babies of in many of the third world. As a result, Nestle began to suffer from an international boycott of its products. Nestle was severely under attack by the world, many of the charges brought against Nestle were against the issues of their advertising and marketing campaigns. The charges raised against Nestle dealt with the alleged discouragement of breast feeding, particularly among third world mothers. The allegations claimed that the advertising and marketing strategies of Nestle are responsible for mothers of third world countries misuse of their products, which directly resulted in infant malnutrition and death. The major problem facing Nestle was that many people believed they were intentionally misrepresenting their products to the public. This however was very untrue. Nestle has never advocated bottle feeding instead of breast feeding. Also, it clearly states on Nestles products that breast feeding is the most effective way to properly deliver the essential nutrients and vitamins to growing babies. As evidence for their support of breast feeding, Nestle took a page from their oldest educational booklets on “Infant Feeding and Hygiene”...
Words: 1350 - Pages: 6
...only two choices for how to feed their infants: they could breastfeed their infants themselves, or they could seek out a “wet nurse.” In the 1920s, a third option was introduced in developed nations—infant formula, a manufactured alternative to breast milk. Depending on its audience, this alternative was seen as a lifesaving option, a modern way to feed a child or a shameful health risk. Many people who have heard about the International Code of Marketing of Breast-milk Substitutes have expressed interest in knowing more about it. Baby food for the infants is the most sensitive one. Doctors suggest exclusive breast feeding for the infants. But for some cases like sickness, temporary disablement or for any other reasons mothers cannot breast feed to their babies. And for that they have to choose infant formula for their infants. Like any other products, parents of infant go through a selection process to choose a baby food. The purpose of this document is to provide concepts and terms of business ethics regarding marketing infant formula or baby food in the developed and low developing countries. Some of the scenarios of Bangladeshi baby food industries have also been analyzed. What is the International Code of Marketing of Breast Milk Substitute The Code is a set of recommendations to regulate the marketing of breast-milk substitutes, feeding bottles and teats. The Code was formulated in response to the realization that poor infant feeding practices were negatively affecting...
Words: 7967 - Pages: 32
...has led to adoption, development and implementation of various code of ethics to be followed by companies in order to evolve ethically in business world. History has many evidences of rise and fall of various major corporations, by means of involving in various unethical activities and frauds, such as, HIH insurance, One.Tel, Enron etc to name a few. One of the renowned MNCs, Nestle, has been in the conflicts since long regarding the issues of corporate social responsibility and ethics. Nestle has faced severe criticism for its marketing and business strategies, for transgressing human and workforce rights and environment. Nestle had a bad name in history with its infant formula controversy, as the company involved in marketing, promoting and selling its product unethically in underdeveloped nations, due to which it had to face a global boycott ( Post, 1985). This led to new international code of marketing by WHO, for breast milk substitutes and also raised various issues and concerns regarding human rights and commercial interests, in terms of Corporate Social Responsibility (Post, 1985). Nestle, seemed to have not learned much from its experiences as it is continuously being among one of the most controversial...
Words: 1682 - Pages: 7
