Nestlé CEO launches blatant violation in China

Background:

Nestlé’s Chief Executive Officer, Peter Brabeck Letmathé, claims that he personally investigates ‘any hint of a violation’ of the World Health Organisation marketing requirements. Yet generally he fails to respond to our reports or a member of staff attempts to justify malpractice. We believe that Mr. Brabeck has institutionalised violations of the Code and Resolutions to increase company profits and has taken a conscious decision to invest in public relations strategies (such as the booklet shown below) to try to divert criticism. Further proof comes as Mr. Brabeck has personally launched a blatant violation of the Code and Resolutions in China.

In May 2005 Nestlé was forced to recall its Neslac Gold 3 and Chengchang 1+ formulas in China after the authorities found they had higher than permitted levels of iodine. Nestlé first resisted the recall. The China Daily newspaper reported (10 June 2005): "Many believe it reacted with the speed and alacrity of a sailor drunk on shore leave” and said “as many many as 87 per cent of consumers said they would stop purchasing Nestlé products, primarily because of the firm’s lukewarm response to the milk powder issue after the problem was found.” China’s implementation of the Code is weak.

Half of Nestlé’s sales in China are infant formula and other nutritional products. Reporting on evidence of aggressive marketing last year China Daily (21 May 2004) noted: “The number of babies in China fed exclusively on breast milk during their first four months of life has declined from around 76% in 1998 to only 64% today.”

In a recent interview with Mr. Brabeck China Daily (17 October 2005):

“Sales growth on the Chinese mainland, Hong Kong and Taiwan slowed to 7.5 per cent last year, held back by the withdrawal of Neslac. Brabeck is looking to the mainland, the world’s fastest growing major economy, to stoke demand as European consumer spending stagnates. The milk-powder cans now carry a sticker with a ‘Thumbs-up’ logo to show it’s produced in line with iodine standards. Nestlé is giving out samples and stationing doctors in Beijing supermarket chains to answer customer concerns.”

Article 5.5 of the International Code explicitly prohibits companies from targetting pregnant women and mothers of infants and young children. UNICEF has informed Baby Milk Action that young children are defined as up to 3 years of age and the prohibition is absolute (click here for UNICEF's letter). Companies cannot use a milk for older babies as an excuse for the contact.

One of the brochures produced by Nestlé’s anti-boycott team, with an introduction by Mr. Brabeck in which he states: “If we find that the Code has been deliberately violated, we take disciplinary action. As CEO, I personally review any reports of Code violation and I make sure appropriate action is taken.” Will Mr. Brabeck sack himself for the blatant violation in China?

It is even more futile asking the Chairman to take action to stop Mr. Brabeck's malpractice as in April, despite the opposition of many investors, Mr. Brabeck became Chairman as well as CEO. This violates corporate governance best practice introduced in the wake of the Enron scandal (see Update 36).

Thanks to people writing letters (see May 2005 action sheet) and pressure from the boycott, it seems Nestlé may be shifting its ground on Baby Milk Action’s proposed independent, expert Tribunal. This will investigate who is telling the truth about its marketing practices. Senior Policy Advisor, Beverley Mirando (one of the producers of the above PR brochure) was pressed by an interviewer on University of East Anglia Livewire student radio on Nestlé’s refusal during the Student Union referendum on re-newing support for the boycott. Ms. Mirando said Nestlé is now prepared to consider taking part .

Suggested letter to the man who thinks spending a fortune on PR offensives is better than changing company policy and practice, Peter Brabeck-Lethmathé, Chief Executive, Nestlé S.A. Avenue Nestlé 55, Vevey 1800, Switzerland. You can select the text below and copy and paste it into a word-processor or into the comment page on the Nestlé site. Note Nestlé keeps changing the address of the comment page. If the link to it is dead go via http://www.nestle.com/.

UK government to abandon mothers to baby food companies?

Background:

It is 15 years since the UK government was one of the countries signing the Innocenti Declaration on the Protection, Promotion and Support of Breastfeeding. In November 2005 campaigners celebrated the increase in breastfeeding rates and legislation stopping baby food marketing malpractice, which the Declaration has helped to achieve (see Update 37). At the same time the UK Government was apparently abandoning its commitment to one of the key undertakings.

The Declaration called for a national breastfeeding coordinator and a multisectoral national breastfeeding committee to be introduced. Although the committee did not see the light of day, National Breastfeeding Coordinators for England, Wales, Scotland and Northern Ireland were appointed. We now hear the English post may be scrapped.

A coordinated approach is more important than ever. Baby food companies are exploiting the lack of government investment in breastfeeding support in increasingly aggressive ways. The leaflets shown here are produced by companies and placed in clinics. At first sight they seem to be providing impartial information on infant feeding as there are no company logos on the front. Mothers are likely to collect them alongside health service leaflets. Inside they promote company brand names and encourage mothers to visit company websites, phone company carelines and sign up to company mother and baby clubs. “Which baby milk should I use, and when?” asks this leaflet, seemingly providing objective information. But when you arrive at home you find the SMA logo. The Cow & Gate leaflet pictured here says: “Fancy £1,000 worth of Mothercare vouchers?” Company websites often offer free samples of follow-on milks and other inducements.

At the same time, companies are co-opting the healthcare system to direct mothers to them. For example, Cow & Gate is promoting its branded telephone ‘careline’ to health workers in a letter: “we’re happy to take calls direct from mums. So, when you can’t be there to listen, we can be an extra pair of ears.... We’re keen to show you that we’re a valuable source of additional impartial help for you... and you could win £250 to spend at Marks & Spencer.” Clearly Numico, the company behind the Cow & Gate formula brand, does not understand the meaning of the word ‘impartial’. Neither is it fulfilling its responsibilities under Article 5.5 of the International Code.

Although the UK government has yet to implement the Code and Resolutions fully in legislation, Article 11.3 of the Code requires companies to abide by its provisions independently of government measures.

Suggested letter to Caroline Flint MP, Public Health Minister ,
Department of Health, Richmond House, 79 Whitehall, London,
SW1 2NS. (You can select the text below and copy and paste it into a word-processor or into an email).

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