Nestle faced an ethical issue in the 1970s regarding the marketing of infant formula in developing countries. This led to infant deaths as mothers could not properly prepare the formula. Groups protested Nestle's promotion of formula over breastfeeding. When this became public, it resulted in boycotts of Nestle products. Nestle has since updated its policies but is still monitored by groups and subject to some ongoing boycotts over its practices.

1. BUSINESS ETHICS
ASSIGNMENT
28/01/2012
SUBMITTED TO: PROF. B. SAJU
SUBMITTED BY: NEETIKA KALYANI
11MBA0043 [BATCH-A]

2. ETHICAL ISSUES FACED BY
NESTLE
BABY MILK ISSUE:
The most resounding and far-reaching unethical international business practices
that Nestlé has been involved in is the marketing and sale of infant milk formula in
developing countries in the 1970s. This practice resulted in several premature infant
deaths because uneducated and poor mothers ceased to breastfeed and instead fed
their babies Nestlé’s formula. Unable to understand the instructions for preparing the
formula and having insufficient money to afford adequate doses of it, led several of
them to unknowingly starve their children to death.
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 are four problems that can arise when poor mothers in developing countries
switch to formula:
• Formula must normally be mixed with water, which is 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. Even mothers able to read in their
native tongue may be unable to read the language in which sterilization
directions are written.
• Although some mothers can understand the sanitation standards required often
do not have the means to perform them: fuel to boil water, electric (or other
reliable) light to enable sterilization at night. UNICEF estimates that a formula-fed
child living in disease-ridden and unhygienic conditions is between six and 25
times more likely to die of diarrhea and four times more likely to die of pneumonia
than a breastfed child.
• 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.
• Breast milk has many natural benefits lacking in formula. Nutrients and
antibodies are passed to the baby while hormones are released into the mother's
body. Breastfed babies are protected, in varying degrees, from a number of
illnesses, including diarrhea, bacterial meningitis, gastroenteritis, ear infection,
and respiratory infection Breast milk contains the right amount of the nutrients

3. essential for neuronal (brain and nerve) development The bond between baby
and mother can be strengthened during breastfeeding. Frequent and exclusive
breastfeeding can also delay the return of fertility, which can help women in
developing countries to space their births.
CONSEQUENCES FACED BY NESTLE
When news of this reached the global public in the late 1970s, it caused a boycott of
Nestlé products in the United States and several European countries, which has, to
this day, not yet completely ceased. Nestlé has since stopped marketing the formula
in third world countries and in their marketing policy they now maintain that breast
milk is the most appropriate form of nutrition for infants, but that women who can’t or
choose not to breastfeed can find a good substitute in using the formula.
Current status of the boycott:
The Nestlé boycott is currently coordinated by the International Nestlé Boycott
Committee, the secretariat for which is the UK group Baby Milk Action. Company
practices are monitored by the International Baby Food Action Network (IBFAN),
which consists of more than 200 groups in over 100 countries.
In parallel with the boycott, campaigners work for implementation of the Code and
Resolutions in legislation, and claim that 60 countries have now introduced laws
implementing most or all of the provisions.
Many European universities, colleges, and schools have banned the sale of Nestlé
products from their shops and vending machines. In the United Kingdom, 73 student
unions, 102 businesses, 30 faith groups, 20 health groups, 33 consumer groups, 18
local authorities, 12 trade unions, education groups, 31 MPs, and many celebrities
support the Nestle boycott.

4. Nestlé claims that it is in full compliance with the International Code. According to
Nestle CEO Peter Brabeck-Letmathe, "we also carry out annual audits on WHO
Code compliance with a sample of Nestlé companies, and we investigate any
substantiated claims made by those who believe we have broken the Code.... If we
find that the Code has been deliberately violated, we take disciplinary action. The
company maintains that many of the allegations are unsubstantiated, out of date, or
use IBFAN's own non-standard interpretation of the Code.
In May 2011, the debate over Nestlé's unethical marketing of infant formula was
relaunched in the Asia-Pacific region. 19 leading Laos-based international NGOs,
including Save the Children, Oxfam, CARE International, Plan International and
World Vision have launched a boycott of Nestlé and written an open letter to the
company. Among other unethical practices, the NGOs criticized the lack of labelling
in Laos and the provision of incentives to doctors and nurses to promote the use of
infant formula
Boycott in the media:
An episode of the TV show The Mark Thomas Product produced by the British
Channel Four in 1999 investigated the boycott and Nestlé's practices concerning
baby milk. Mark Thomas attempted to find evidence for claims against Nestlé and to
speak to heads of the company. In one portion of the show he "received a tin of baby
milk from Mozambique. All instructions are in English. 33 languages and dialects are
recognized in Mozambique. Portuguese is the official language. However, only about
30% of the population can speak it. English is usually the second language for
people in Mozambique.
In 2001, comedian Robert Newman and actress Emma Thompson called for a
boycott of the Perrier Comedy Award, because Perrier is owned by Nestlé. An
alternative competition called the Tap Water Awards was set up the following year.
Other Nestlé operations targeted:

5. Nestlé is sometimes targeted for other aspects of its operations. A Brazilian group
called Cidadãos pelas Águas (Citizens for Water) has called for a boycott of Nestlé
in Brazil over the company's extraction of water from an aquifer in São Lourenço.
Some also boycott Nestlé coffee and chocolate products in favour of fair trade
alternatives. (Partners Blend coffee, launched by Nestlé during 2005, has obtained
Fairtrade labelling status.) Baby Milk Action has also condemned this development.
In the Philippines, there exists a Boycott Nestlé campaign due to suspected labor
rights violations in a factory in Laguna province. This campaign is led by Kilusang
Mayo Uno.
STEPS TAKEN BY Nestlé TO SOLVE
THE ISSUE CREATED
Re-writing history:
After a break of more than a year, Nestlé's Code 'Action' Report has appeared on the
scene again and been distributed to health campaigners and policy makers around
the world. Nestlé welcomes one aspect of Resolution 54.2 adopted by the World
Health Assembly in May 2001. This relates to the appropriate age for introducing
complementary foods.
However, this is just one issue addressed by the Resolution. Nestlé ignores other
aspects, probably because it is already violating provisions enshrining a mother's
right to information free from commercial influence. For example, Nestlé recently
launched an infant formula promotion campaign in southern Africa which violates the
sections relating to HIV and infant feeding.
In the 'Action' Report Nestlé's Chief Executive Officer, Peter Brabeck-Letmathé,
states:
"I can publicly assure you that Nestlé is in favour of the new recommendation as it
aims at removing the ambiguity on the recommendation which prevailed up to now,
and hopefully will end the long-standing debate over the optimal duration of
exclusive breastfeeding."
Mr. Brabeck's statement misrepresents the Resolutions adopted in the past by the
World Health Assembly and attempts to excuse 7-years of inaction by Nestlé.
Nestlé in Brazil:

6. It is worth commenting on the interview with José Serra, Minister of Health Brazil,
obtained by Nestlé and published in the Code 'Action' Report.
The Brazilian government has taken a strong line in putting forward Resolution 54.2
and has been congratulated by IBFAN and Baby Milk Action for this and other stands
it has taken in support of infant health. However, the government is also under
immense pressure from the baby food industry. Last year it planned to publish the
results of its own monitoring which found violations by companies including Nestlé.
Nestlé dispatched its Vice-President, Niels Christiansen, prompting newspaper
articles about industry lobbying to suppress the report, followed by claim and counter
claim. While it is known that one government department refused to discuss the
report with Mr. Christiansen, it has still not been published over a year later.
In the interview published by Nestlé, José Serra, Minister of Health Brazil, states:
"The Brazilian food industry was an important partner in both the formulation and
recent update of the Code [in Brazil]". It should be appreciated that this is a
statement from a politician in diplomatic mode. Elsewhere the Brazilian Ministry of
Health has written:
"The outcomes of the government policies toward breastfeeding in Brazil have
become well-known internationally. Brazil is perhaps the only country in the world to
have managed, by implementing integrated strategic actions, to take on the
aggressive infant food industry marketing and reverse the disastrous impact of
untimely weaning on infant health."
IBFAN was also involved in the development of the Brazilian Code and has worked
to strengthen it to reflect all WHA Resolutions and received the Order of Merit from
José Serra on 18th June 2000 for the actions it has developed to promote
breastfeeding.