Most of the charges against infant formulas focus on the issue of discouraged breast feeding among Third World mothers and have led to misuse of the products, thus contributing to infant malnutrition and death....

1. CASE 1-2
NESTLÉ: THE INFANT
FORMULAR CONTROVERSY

2. CONTENT
• Case summary.
• Answer the questions
1. Responsibilities of companies in this situation.
2. What Nestlé have done to have avoided the accusations of “killing third
world baby” and market its product.
3. Suggesting to protect company in the future.
4. Situation resolving.
5. Advices for Nestlé in lights of new problem of HIV infection being spread
via mother`s milk.

3. Case summary

4. For over 20 years,
Nestlé has been directly
and indirectly charged
with involvement in the
death of Third World
infants
In 1974, A report with a
pamphlet entitled “ Nestlé
kill babies” is published.

5. The charges
Most of the charges against infant formulas focus on the issue of
discouraged breast feeding among Third World mothers and have led to
misuse of the products, thus contributing to infant malnutrition and death.
 In northern Peru where water come from a highly contaminated river.
 Throughout the Third World, many parents dilute the formula to stretch
their supply.
 The children had never been breast fed, and since birth their diets were
basically bottle feeding.
 In rural Mexico, the Philippines, Central America, and the whole of Africa,
there has been a dramatic decrease in the incidence of breast feeding.

6. The defense
After some criticism, Nestle still said that they believe
breast feeding is still the best for infant. However, for some
reason, mothers cant feed their baby with their own milk so
they should use nutrition milk or mixed food instead.
However, in third world countries, material and water are
really contaminated so it might be harmful for infants.

7. The Resolution
In 1974, Nestle, aware of changing social patterns in the
developing world and the increased access to radio and
television there, reviewed its marketing practices on a
region-by-region basis.
CODE

8. In 1977, the Interfaith Center on Corporate
Responsibility in New York compiled a case against formula
feeding in developing nations, and the 3rd World Institute
launched a boycott against many Nestle products.

9. …regulate the advertising
and marketing of infant
formula in the 3rd world.
The INFACT (The Infant Formula Action Coalition) lobbied
the WHO to draft a „code‟ to regulate the advertising and
marketing of infant formula in the 3rd world.
May 1981

10. In May 1982, Nestle formed the Nestle Infant Formula
Audit Commission (NIFAC)
NIFAC recommended several clarification for the
instructions of the code.
In October 1982, Nestle accepted those recommendation.
Other issues within the code, such as the question of a
warning statement, were still open to debate.

11. Nestlé supports WHO codes
Nestlé implements WHO codes:
Immediately support the WHO codes
Issue instructions to employees, agents, distributors
Establish an audit commission
Consult with WHO, UNICEF, and NIFAC
Etc.

12. Nestlé policies
• Adopting articles of the WHO code as Nestlé
Policy
• Nestlé and other manufacturers are accused of
violating WHO codes-
• Nestlé rejected the accusations

13. • In 2001, it was believed that some 3.8m
children around the world has contracted
the HIV virus at their mother‟s breasts.
• Majority of women in developing countries
don‟t know whether they are HIV infected
or not. Healthy mothers make their child
safer by bottle feeding.
The new
twists

14. The new
twists
• The mothers may continue breast feeding
to avoid being stigmatized once bottle
feeding becomes a badge of HIV infection.
• In Thailand, pregnant woman are given
free milk powder after founding HIV
positive.
• Demand for infant formula in South Africa
grew 20% in 2004, and the Government
investigated the shortages as Nestlé
scrambled to catch up with demand.

15. ANSWER THE QUESTIONS

16. Question 1: responsibilities of company
in this situation
• Find a way to become involved with the Baby-Friendly Hospital
Initiative, like sending in donations or even working with the
organization to help.
• Remain a member of Infant Food Manufactures (IFM).
• Keep its internal Nestlé instructions to Nestlé employees updated
and up to standards to avoid any more problems.
• Continue their efforts on social responsibility by sponsoring
events at international medical and nutrition conferences, and
events like celebrating the Vietnam Year of the Family, and
funding research on infant feeding.

17. • Be careful with their pricing strategy and make sure they
are selling their products in third world countries for
reasonable and affordable prices for the people, and they
should maybe consider selling the products for even less
in these places.
• Nestlé also needs to learn from its mistakes and not be so
neglectful and they should respond to issues in a
reasonable amount of time, because when they do
not, they look irresponsible and careless.
• Do what ever it can to reposition itself as a force of good.

18. Question 2: Avoiding the accusations
• Learn about countries‟ culture they market
• Support breastfeeding and its benefits
• Encourage using formula for special situations
• Offer testing HIV

19. Question 3: Suggesting to protect company on
the future
Before nestle or any enterprise enter to the new market,
they have to understand well about the tradition, life style,
economic status, natural conditions…they should do more
study about medical effects of their product and services
because they provide such an important for human beings.
When they do business, they should not only care about
making profit but also their consumer. For people in third
country, these company should do promoting in healthy
eating habit for mothers during her pregnancy and then
baby. Doctors is really needed for some urgent situations.

20. Question 4: situation
Assume you are the one who had to make the
final decision on whether or not to promote
and market Nestlé's baby formula in the Third
World countries. Read the section titled
“Ethical and Socially Responsible Decision” in
Chapter 5 as a guide to examine the social
responsibility and ethical issues regarding the
marketing approach and the promotion used.
Were the decisions socially responsible? Were
they ethical?

21. ETHICAL AND SOCIALLY RESPONSIBLE DECISIONS
• Difficulties arise in making decisions, establishing
policies, and engaging in business operations in five broad
areas
– Employment practices and policies
– Consumer protection
– Environmental protection
– Political payments and involvement in political affairs
of the country
– Basic human rights and fundamental freedoms
• Laws are the markers of past behavior that society has
deemed unethical or socially irresponsible
• Ethical principles to help the marketer distinguish between
right and wrong, determine what ought to be done, and
justify actions
– Utilitarian Ethics
– Rights of the Parties
– Justice or Fairness

22. • unqualified sales girls
• the distribution of free samples
• marketed to people who were incapable to fulfill the
minimum requirements for giving formula safely to the
baby
• 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.
Global Marketing (MKT 690)
Professor Godwin Ariguzo
Presented by:
Jillian DeSousa
Kerri Levesque
Aziza Akilah Williams
August 6th, 2008

23. ADVERTISING & PROMOTION IN THE THIRD
WORLD

24. Cost 1/3 weekly income of their family in the third world countries.
PRICE
In Nigeria in 1974
0%
10%
20%
30%
40%
50%
30%
47%
Feedingcost
Feeding cost percentage in minimum urban
wage
3 month old infant
6 month old infant

25. Advertisements and
posters used idealistic
imagery, often showing
white children rather than
the ethnicity of that
country, suggesting that
bottle-feeding is the
modern, western
way, therefore the right
way of doing things.

26. … “Wash your
hands thoroughly
with soap each
time you have to
prepare a meal for
baby”….

27. • Continue to show support towards breast feeding.
• Contribute towards programs that provide education and
empowerment for women, especially in Third World
countries.
• Contribute towards research on how to reduce the risk of
mother-to-child transmission.
Question 5: Advice for Nestlé