Nestlé and Fairtrade - PR coup or PR disaster?

Nestlé has added Fairtrade KitKat to its Fairtrade Partners Blend Coffee. These are its only Fairtrade-certified products amongst its range of 8,500.

Fairtrade KitKat involves just 1% of Nestlé cocoa purchase and Nestlé is criticised for failing to deliver on its promise to end child slavery in its cocoa supply chain by 2006.

Download our leaflet on Nestlé and Fairtrade by clicking here.

This is an archive page where we tracked how Nestlé uses the Fairtrade mark in its attempts to divert criticism of its malpractice. For the latest on the Nestlé boycott, visit the Nestlé-Free Zone on our new site at:
http://info.babymilkaction.org/nestlefree

Latest addition: Nestlé 2007 campaign

For example, on its Grow More than Coffee website Nestlé claims:

"The problem with the world coffee market is that sometimes there are simply too many beans... Nestlé's long-term commitment is to develop sustainable agricultural practices, and we have been involved in a number of initiatives for many years. NESCAFÉ Partners' Blend, our first Fairtrade certified coffee, is our latest initiative to help solve this longstanding problem."

If it was simply a case of supply of coffee outstripping demand , prices for consumers would also have fallen. This is not the case. According to Oxfam's coffee report Mugged, coffee processors such as Nestlé have played the market to boost their profits while coffee growers are driven into poverty:

"Profit margins are high - Nestlé has made an estimated 26 per cent profit margin on instant coffee. Sara Lee's coffee profits are estimated to be nearly 17 per cent - a very high figure compared with other food and drink brands. If everyone in the supply chain were benefiting this would not matter. As it is, with farmers getting a price that is below the costs of production, the companies' booming business is being paid for by some of the poorest people in the world."

Nestlé has a history of shooting itself in the foot when it launches a new PR strategy (e.g. its anti-boycott advertisement which led to a damning ruling from the Advertising Standards Authority and front page stories about its malpractice).

It will be interesting to see if Nestlé's strategy for its Fairtrade product will be a PR coup or another PR disaster.

Where you see this symbol, it means Nestlé has pulled off a PR coup using its Fairtrade product.

Where you see this symbol, it means Nestlé's efforts have brought more attention to its malpratice.

Of course, the simplest way for Nestlé to avoid PR disasters is by accepting Baby Milk Action's four-point plan aimed at saving infant lives and ultimately ending the boycott and stopping its other human rights and environmental abuses. Until such time, wherever and whenever Nestlé gains publicity we will work to highlight its malpractice and encourage others to do the same.

For further background details see Your Questions Answered: Why has a company as unethical as Nestlé been given a Fairtrade mark for its Partners Blend coffee?

Please contact us if you have anything to be added to this report.

• Launch publicity
• Impact on support for the boycott
• Post launch coverage
• Listing on the Fairtrade website
• Bristol Trade Justice event
• New Internationalist advertisement and article
• Putting the spotlight on how Nestlé treats farmers in Colombia
• Ethical Corporation magazine feels sorry for Nestlé
• Nestlé's 'advertisement feature'
• Italian Fairtrade Organisation critical of award of Fairtrade mark to Nestlé
• Nestlé baby food marketing and other malpractice highlighted on national UK radio programme about Fairtrade
• Nestlé's 2007 campaign

Launch publicity

Nestlé and the Fairtrade Foundation presented Partners Blend to selected journalists on 7 October 2005, in a campaign devised by Freud Communications. The media, almost without exception, put the launch in the context of Nestlé's poor ethical record, principally its baby food marketing. In most cases Baby Milk Action had spoken with the journalists or they had seen our press release.

For example, Britain's biggest- selling 'broadsheet' newspaper (The Telegraph) remarked:

"Nestlé, whose products include Nescafé, KitKat, Perrier and Ski, is the most boycotted company in Britain, according to a survey published last month.

"It has been criticised by campaigners for nearly three decades for aggressively marketing baby milk powder in developing countries despite overwhelming evidence that breast-feeding saves more lives.

"The company has also been attacked for its record on workers' rights and the environment."

The headlines themselves were not the free good publicity Nestlé was hoping for:

• Nestlé launches Fairtrade coffee amid claims of cynical ploy (The Scotsman)
• Fairtrade criticised over Nestlé approval (The Telegraph)
• Nestlé launch of Fairtrade coffee divides company's critics (The Guardian)
• Nestlé defies boycotters and 'ethical shoppers' by launching its own Fair Trade coffee brand (The Independent)
• Nestlé dubbed cynical over Fairtrade coffee (Western Mail)

Some of the above were picked up internationally, meaning that in places such as Taiwan and Thailand people were reading about Nestlé being ethically questioned and the target of a boycott.

Some of the headlines were less troubling for Nestlé, though still referring to its ethical record:

• Nestlé brings market muscle to "Fairtrade" coffee (Reuters)

Nestlé will have been happier with the Fairtrade Foundation press release with a quote from the Fairtrade Foundation which was reproduced in many articles:

“This is a turning point for us and for the coffee growers,” says Harriet Lamb, Director of the Fairtrade Foundation. “It's also a turning point for the many people who support Fairtrade and have been pressing the major companies to offer Fairtrade coffees. This just shows what we, the public, can achieve. Here is a major multinational listening to people and giving them what they want – a Fairtrade product.”

The press release did not mention Nestlé's malpractice or the boycott and listed member organisations of the Fairtrade Foundation, which could be read as if all had been consulted about the launch and approved of it:

"The member organizations of the Fairtrade Foundation are Banana Link, CAFOD, Christian Aid, the Methodist Relief & Development Fund, the National Federation of Women's Institutes, the Nicaragua Solidarity Campaign, Oxfam, People & Planet, SCIAF, Shared Interest Foundation, Traidcraft Exchange, the United Reform Church and the World Development Movement. Elected representatives of these organisations sit on the Fairtrade Foundation's Board of Trustees, and were consulted as part of the planning for the launch of this product."

In reality not all organisations are represented on the Board of Trustees. Some issued their own statements (click the links above), some of which did not quite echo the tone of the Fairtrade Foundation press release. The Fairtrade Foundation has since linked to some of these statement from its press release.

People and Planet's statement includes the following:

"However, we need to bear in mind that Nestlé has been awarded the FAIRTRADE Mark for just one product out of the 8,000 or more that it produces. Nestlé has not changed its policies and practices in any other area, most notably that of the unethical marketing of baby milk in southern countries. Whilst recognising that the introduction of a Fairtrade product is a step forward, we see no reason to review our support for the boycott of Nestlé and shall continue to urge them to work towards applying ethical standards in all areas and across the range of their products."

The World Development Movement statement includes the comments:

"the launch of Nestlé Partner's Blend coffee is more likely to be an attempt to cash in a growing market or a cynical marketing exercise than represent the beginning of a fundamental shift in Nestlé's business model.

"If Nestlé really believes in FAIRTRADE coffee it will alter its business practices, lobbying strategies and radically overhaul its business to ensure that all coffee farmers get a fair return for their efforts. Until then Nestlé will remain part of the problem not the solution....

"WDM has asked its supporters to boycott Nestlé products since as far back as 1998 based on the company's attempts, contrary to World Health Organisation codes, to market its baby foods in developing countries, undermining breastfeeding. The addition of a FAIRTRADE coffee to their range does not change that. We ask our supporters to use their powers as consumers to choose companies that help rather than hinder attempts to end poverty."

The statement from the National Federation of Women's Institutes includes the comments:

"As a charity campaigning for women's rights in Britain and overseas, the NFWI remains seriously concerned about Nestlé's wider practices, in particular the ongoing breaches of the WHO international code of marketing of breast milk substitutes. WI members are expected to carry on campaigning on this issue and the NFWI continues to support the Nestlé boycott."

So while Nestlé will no doubt stress the comments welcoming its Fairtrade product, those looking a little more closely at these and other statements will see there are qualifications and may come across Nestlé's baby food marketing malpractice for the first time.

Impact on support for the boycott

Our consultation with supporters suggests that they are not taken in by Nestlé's move into Fairtrade and it will not undermine existing support for the boycott.

However, the consultation suggests there is confusion about what the mark means, with 47% incorrectly thinking the Fairtrade Foundation has verified that there are no serious ethical concerns with the company. Many said their view of the mark would change if Nestlé received an award.

Only 17% realised there could be concerns and the mark relates only to the suppliers of the product that bears it and not all suppliers to the company.

If this misunderstanding of what the mark does and does not mean is reflected amongst those who support Fairtrade but are new to the boycott it will make it harder to persuade them of Nestlé's malpractice.

The Fairtrade Foundation Q&A about the Nestlé product does spell out what the mark does and does not signify. If people are aware of this Nestlé will find it difficult to portray itself as a 'Fairtrade company'"

"The FAIRTRADE Mark is only given to individual products and not to companies. The Mark indicates that the product Partners' Blend has complied with the internationally agreed standards for Fairtrade certification. It does not refer to any other product marketed by the company. This product has undergone exactly the same certification process as all other Fairtrade products whether marketed by multinationals or smaller companies (see Q8 for further details). The FAIRTRADE Mark guarantees consumers that those producers have received a fair and stable price for their product. The Mark is not an endorsement of any company or its activities."

Unfortunately this information only appears in the Q&A. It does not appear in the background information on the mark, nor where products are listed.

Post launch coverage

BBC Radio 4 You and Yours covered Nestlé's entry into the Fairtrade market on 20 October 2005, with a 20 minute debate billed:

"This week there's a new Fairtrade certified coffee product on our shelves - called Partner's Blend - produced by the multinational Nestlé. We find out how big business is responding to calls for fairer trade with the developing world". 

Although asked what proportion of Nestlé's coffee would now be Fairtrade, Nestlé's Head of Corporate Affairs, Hilary Parsons, ducked the question, instead speaking of the farmers who would be helped through the product (the answer is virtually 100% of Nestlé's coffee suppliers remain outside the Fairtrade system - click here for details). Ms Parsons had five minutes to portray the company as ethical and caring.

While questions were raised about its motives, the Fairtrade Foundation and other people on the programme welcomed Nestlé's move and did not consider how the mark would be used as part of a wider PR strategy.

Baby Milk Action phoned and sent an email, but was unable to contribute to the programme.

There was a passing reference in the interview with Nestlé to the boycott and Nestlé's baby food marketing malpractice (but that suggested malpractice was in the 1980s).

The Sunday Times in Manila, the Philippines, published an article on 23 October 2005 Fair Trade has spiritual roots

This reports Nestlé's entry into the Fair Trade market in the context of the assassination of Nestlé's malpractice, which is particularly poignant in that country:

"Such a proud corporation should never allow dishonor, violence and injustice dirty its doorstep. But there is more than dirt in that pristine doorstep. There is blood, that of Diosdado Fortuna, the union leader of the Nestlé Philippine Union in Calamba, Laguna, two hours south of Manila."

The article notes the success of the baby milk campaign in forcing Nestlé to change its more blatant advertising activities. Now "it's more subtle in its advertising". The Philippines is a country where the boycott has been launched (by the group Arugaan). It seems that Nestlé's Fairtrade product will do nothing to weaken support there:

“"To give a Fair Trade Mark to Nestlé,” said Patti Rundall of Baby Milk Action, “would make an absolute mockery of what the public believes the Fair Trade Mark stands for.” Nestlé's proposal is “an entirely cynical token move whose main aim is to rescue the company's appalling image . . . most of Nestlé's coffee is bought on world markets at crippling low prices,” she said. What more can we say to that? Pour the herbal tea?"

On 26 October 2005 Reuters reported Consumers demand more morals on the menu. Nestlé's paltry Fairtrade coffee purchase earns it a mention alongside global processors who buy 10% of their coffee from suppliers certified under a rival scheme.

Fairtrade website listing

The listing of coffees on the Fairtrade website gives prominence to the company name, not the product name.

The Fairtrade Foundation has still to change the page to make it clear the Fairtrade rating applies to the product only and that there may be concerns about the way other suppliers are treated and other significant ethical issues about the company.

On the page, Nestlé appears prominently, together with Oxfam, which has campaigned against the company's continuing role in causing the coffee crisis.

Bristol Trade Justice event

Nestlé's Head of Corporate Affairs, Hilary Parsons, was an invited speaker at a Trade Justice and Fair Trade event organised by Oxfam SW and Make Poverty History in Bristol on 27 October 2005.

Nestlé involvement was publicised beforehand without any suggestion that the company was the target of criticism. This was promoted as follows:

"Hear trade experts discuss how trade can bring justice to the developing world this autumn, including: Ed Sweeney (TUC), Hilary Parsons (Nestlé) and Adrian Lovett (Oxfam)."

Panellists from Oxfam and the Trade Union Congress welcomed Nestlé's first step into the Fair Trade market. Pictures were taken of the panellists together by the local paper.

Nestlé's involvement in the event, given its appalling record of human rights and environmental abuses, was questioned from the floor and other ethical concerns raised .

Although Baby Milk Action had not been consulted during the planning of the event, we were invited to have a stall after it came to our attention and also provided 10 Facts leaflets for local supporters to distribute to people as they arrived (click here for the 2010 version). The audience was well briefed as to Nestlé malpractice and its assurances from the platform were seen as a cynical stunt, according to some reports we have received. Our email alert about the event was posted by someone on the Bristol Inymedia website.

New Internationalist advertisement and article

New Internationalist magazine, which has been exposing the baby food scandal and promoting the Nestlé boycott for decades, ran an advertisement in the national UK press on 1 November 2005 in the form of a quiz.

The quiz also featured on the New Internationalist website: Question time... What do you think is most likely? 1. Shell has launched a Fairtrade brand of petrol called 'Green Gold'. 2. McDonald's is to launch a Fairtrade organic burger called 'McOrganic'.

3. Boeing will be product testing a new range of Fairtrade missiles called 'Fairy Dust'.

4. Nestlé has launched a Fairtrade coffee brand called 'Partners' Blend'.

The press advertisement directed people to the website to complete the questionnaire. Answers 1 to 3 linked to pages reminding people of these companies malpractice.

Answer 4 linked to a page saying:

"No it can't be... The UK's most boycotted company. Infamous for their unscrupulous marketing of baby milk powder, which has contributed to the death of millions of infants in places where water is unsafe. Well this is the correct answer - and it's happening now in the UK.

"The wrong label In a move that has astonished campaigners in the trade and global-justice movements, the giant Nestlé corporation has been awarded a ‘Fairtrade' mark for a new brand of its coffee in Britain. David Ransom wonders why. CLICK HERE to read more... "

The article debated the values of the Fair Trade campaign and the best way for it to grow and highlighted Nestlé malpractice in a range of areas:

"The launch of ‘Partners' Blend' comes at an unfortunate time, in the very same month as the labour movement in the Philippines mourns the assassination of the leader of a protest at a Nestlé factory; as trade unionists from Colombia gather in Switzerland to present evidence of Nestlé's links to paramilitary death squads; and as a campaign is launched in the US over Nestlé's alleged association with child labour in the harvesting of cocoa beans. Truth to tell, any other time would probably be equally unfortunate."

Putting the spotlight on how Nestlé treats farmers in Colombia

It is sometimes said that companies with poor records are reluctant to make a change in the right direction because this puts them in the spotlight, showing up all the areas where there are still concerns. Better to give them credit for the good they may be doing and keep quiet about the rest, seems to be the argument.

Yet the nature of the boycott and the campaign against Nestlé malpractice is wherever it rears its head people should be made aware of its corrupt practices, more so when it is dishonestly using token gestures to try to divert criticism.

So while Nestlé boasts about the 200 farmers it is helping in El Salvador through Partners' Blend, we feel duty bound to help campaigners in Colombia highlight the 150,000 coffee-farming families who have lost their livelihoods due to Nestlé policies.

Click here to hear an interview with a researcher with the Colombian Food Workers' Union (Sinaltrainal), who says of Nestlé's comments about its Fairtrade product: "This is a big joke. They are lying to the people."

Ethical Corporation magazine feels sorry for Nestlé

Ethical Corporation magazine ran an article on 7 November 2005 entitled Nestlé – unfairly roasted over Fairtrade.

Author Mallen Baker states that: "Nestlé's recent membership of the Fairtrade movement should be welcomed rather than ridiculed", proving the point that a token product which excludes virtually 100% of its suppliers from the Fairtrade system can be protrayed as a sea-change.

Ethical Corporation is a pro-business publication which promotes voluntary routes to 'Corporate Social Responsibility', rather than binding legislation, and organises conferences on this theme, attempting to encourage campaigning organisations to engage with business instead of working to regulate them.

Ethical Corporation invites campaigning organisations to write articles on their strategies for holding corporations accountable. While some have been flattered by the offer of space in the magazine, Baby Milk Action refused, judging it a waste of our time to participate in an intelligence gathering exercise for business interests.

It is, therefore, significant that the clamour over Nestlé's Fairtrade product has been so loud that Ethical Corporation cannot simply pass off Partners' Blend as an example of 'Corporate Social Responsibility', but has to acknowledge the PR failure of the launch and rush to Nestlé's defence. Once again, Nestlé malpractice is highlighted: