Nestl Alimenting of Vesey, Switzerland, one of the worlds largest food-processing companies with worldwide sales of over $100 billion, has been the subject of an

Nestlé Alimenting of Vesey, Switzerland, one of the world’s largest food-processing companies with worldwide sales of over $100 billion, has been the subject of an international boycott. For over 20 years, beginning with a Pan American Health Organization allegation, Nestlé has been directly or indirectly charged with involvement in the death of Third World infants. The charges revolve around the sale of infant feeding formula, which allegedly is the cause for mass deaths of babies in the Third World. In 1974 a 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. The report accused the industry of encouraging mothers to give up breast feeding and use powdered milk formulas. The report was later published by the Third World Working Group, a lobby in support of less developed countries. The pamphlet was entitled “Nestlé Kills Babies,” and Accused Nestlé of unethical and immoral behavior. Although there are several companies that market infant baby formula internationally, Nestlé received most of the attention. This incident raises several issues important to all multinational companies. Before addressing these issues, let’s look more closely at the charges by the Infant Formula Action Coalition and others and the defense by Nestlé. The Charges. Most of the charges against infant formulas focus on the issue of whether advertising and marketing of such products have discouraged breast feeding among Third World mothers and have led to misuse of the products, thus contributing to infant malnutrition and death. Following are some of the charges made:

• A Peruvian nurse reported that formula had found its way to Amazon tribes deep in the jungles of northern Peru. There, where the only water comes from a highly contaminated river—which also serves as the local laundry and toilet— formula-fed babies came down with recurring attacks of diarrhea and vomiting.

• Throughout the Third World, many parents dilute the formula to stretch their supply. Some even believe the bottle itself has nutrient qualities and merely fill it with water. The result is extreme malnutrition.

• One doctor reported that in a rural area, one newborn male weighed 7 pounds. At four months of age, he weighed 5 pounds. His sister, aged 18 months, weighed 12 pounds, what one would expect a four-month-old baby to weigh. She later weighed only 8 pounds. The children had never been breast fed, and since birth their diets were basically bottle feeding. For a four-month-old baby, one can of formula should have lasted just under three days. The mother said that one can lasted two weeks to feed both children.

• In rural Mexico, the Philippines, Central America, and the whole of Africa, there has been a dramatic decrease in the incidence of breast feeding.

Read the case and answer the following questions:

1. What are the responsibilities of companies in this or similar situations?

2. What could Nestlé have done to have avoided the accusations of “killing Third World babies” and still market its product?

3. After Nestlé’s experience, how do you suggest it, or any other company, can protect itself in the future?

4. 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 Third World countries. Read the section titled “Ethical and Socially Responsible Decisions” 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?

5. What advice would you give to Nestlé now in light of the new problem of HIV infection being spread via mother’s milk?