Professional Documents
Culture Documents
113
114 JAMES E. POST
has created an extremely difficult setting for businesses, governments,
and international agencies to fashion "sensible policy.''
Consider these efforts:
• Since 1975, the international infant formula industry has written a number
of voluntary marketing codes that would curb promotional and sales
abuses. To fashion a "sensible code," drafters had to deal with the
instincts of industry members to compete in any possible way; legal
constraints imposed by the U.S. antitrust laws that limit the degree and
type of cooperation in which American companies can engage; and critics
who were charging "public relations whitewash" for anything less than
strict marketing controls. Each code effort fell short of endorsement
by either industry members, interested government officials, or industry
critics. The net result was a failure of industry self-regulation on an
issue that seemed a perfect candidate for such an approach.
• Governments and governmental agencies have also failed to produce
sensible policies that could survive the gauntlet of industry and critics'
concerns. The United States Cougr~s::. investigated the marketing and
promotion issue on several occasions, and while it provided a valuable
record of information about the issue, it was unable to generate any
legislative or regulatory solutions. U.S. actions that would affect the
marketing behavior of U.S. firms in developing countries were challenged
on legal and political grounds. Extraterritorial effects, it was claimed,
went beyond the legitimate scope of congressional authority. Moreover,
to impose restraints only on U.S. companies, while foreign competitors
operated unrestrained, would harm the U.S. companies while not solving
the problem in the developing nations. Thus, the Congress was unable
to offer policy options that would resolve the perceived problem within
a framework of political and legal constraints.
• The governments of developing nations have experimented wjth actions
to influence both the supply of and demand for infant formula, always
at the risk of antagonizing either businesses, which fear government
activism, or the public health community, which is often skeptical of
their motives. While there have been a few notable exceptions, most
national governments have been cautious and reserved.
• The World Health Organization (WHO) succeeded in creating an inter-
national code of marketing, but it encountered such ferocious resist.ance
in so doing that there was virtually no political energy left to assist
nations in the implementation of the code. Thus, the international agency
which is arguably in the best position to assist industry and national
governments in creating workable and appropriate marketing code pol-
icy, is widely perceived as having abandoned the issue. Industry leaders,
national governments, and critics who campaigned for the WHO Code
are all agreed that WHO has been ineffectual in transforming the code
into a living document.
ASSESSING THE NESTLE BOYCOTT 115
Despite the many difficulties, the controversy and the boycott have
produced a number of actions that public health officials believe have im-
proved the situation of infants in the developing world. The controversy
has brought the altention of health professionaJs throughout the world to
critical issues in maternal and child health; has sbmulated health ministries
in many nations to make commitments to new educational and service
programs; and, most importantly, has developed a medical consensus about
the desirability of breastfeeding as the best way to provide infant nutrition.
The WHO Code, in turn, has led health protessionals, hospital admini-
strators, and industry officials to reexarnine and change those practices
that undennine or damage a mother's opportunity to breastfeed lier child.
The infant formula controversy and the Nestle boycott are also note-
worthy for the precedents they have established in the area of corpordlt:::
accountability. The developmenl of an inte rnational code of marketing
created a framework in which corporate responsibility could be defined
and evaluated. Nestle's various approaches to dealing with the boycott
provide instructive lessons in "issue manage.ment" and public affairs. The
establishment of the Nestle Infant Formula Audit Commission is an experi-
ment in corporate accountability procedure and practice.
Finally, the infant formula controversy has opened new ground in the
discussion of human rights and commercial interests. This theme, which
has been a crucial one in the infant formula code debates and boycott
campaign, bas broad application to other controversies. Hwnan rights
concerns are an increasingly prominent part of the business e nvironment.
The consumer boycott of Nestle provides an important case study of the
manner in which conflicts between human rights concerns and commercial
interests ebb, flow, and sometimes produce important institutional
changes.
place other products in the babybottle. These product.c, may range from
powdered whole milk (which is unsatisfactory for a baby's digestive system)
to white powders such as corn starch.
By the late 1960s, medical authorities from the developing world were
reporting increased bottlefeeding, a decline in breastfeeding, and a dramatic
Increase in the number of malnourished and sick babies being brought to
hospitals and clinics too late for a "cure." Some pediatricians and experts
in tropic.al medicine were calling bottlefeeding a major public health problem
in the developing world. ' l 'heir professional concern was for the babies,
but their anger was ctirected at the infant fonnula companies whose pro-
motional activities were encouraging mothers of all economic and social
strata to bottlefeed.
In one rc::spect, the infant formula controversy represents an unusual
situation in which physicians have turned into public advocates. Their
professional concern was heightened by the recognition that there existed
an alternative form of infant feeding, whose safety and adequacy had been
demonstrated repeatedly. A mother can safely and adequately breastfeed
a child in conditions of poverty and inadequate sanitation, even if she herseJf
is Wldemourished. However, safety and adequacy cannot be guaranteed
or achieved with any degree of consistency when bottlefeeding is attempted
under the same conditions.
Exacerbating t he problems confronting the mother in a risky environment
were the promotional efforts of the infant formula companies. Promotion
of bottJefeeding and infant lormula products was rampant and unchecked
before 1970. No organized complaints about commercial promotion and sale
had been raised, and the industry operated in carte blanche and caveat
emptor fashion. lvlass media promotion was frequent and intense, featuring
billboards, radio jingles, and other devices. To further persuade mothers,
the companies promoted their products through posters, baby books, and
samples distributed through the health care system itself. The advertising
images of robust, smiling children contrasted sharply with the reality of
malnourished babies. The advertising created an idealized image of what
infants should look Like and a clear concept of how that ideal could be
achieved by even the most destitute of families. By making these images
visible with posters in health clinics and hospitals, companies also implied
:he endorsement of the health profession for their products and their
technology.
The most insidious commercial practice involved ''milk nurses." These
were women employed by the companies on a sales commission basis.
They dressed in nurses' unifonns and literally prowled the halls of maternity
wards encouraging mothers of newborns to allow those babies to be fed
with formula. A commitment from the mother s tarted the baby on the
formula path which, if not quickly reversed, resulted in the mother having
a lactation "let down" that made it impossible for her to breastfeed, When
ASSl-<_;:jSlNG T.H.E N.1-;STLf; BOYC(Jl"f 117
this occurred, the baby was effectively "booked" on bottlefeeding, the
industry had a new customer, and the milk nurse had another sales com-
nussion.
Conc.e med physicians-such as Dr. Derrick Jelliffe, now at UCLA and
formerly the director of the Caribbean Food and Nutrition lnstitute-had
persuaded a United Nations agency, the Protein-Calorie Adyjsory Group,
to place the issue of formula promotion and its connection to infant malnutri-
tion on the agenda of several international meetings in the early 1970s.
Hroad public awareness did not occur until the press began to rarry stories
about the problem several years later. A journalist named Mike Muller
wrote a series of articles in The New lnternati.onalist, and a pamphlet
entitled The Baby Killer (1974), which was published by War On Want, a
British charity organization. The Baby Killer detailed the results of Muller's
research in Africa and concentrated on the marketing actiyjty of Nestle,
which was the industry's largest member. The pamphlet was subsequently
published in Switzerland, Nestle's borne country, under the title Nestle
Kills Babies.
Nestle sued the Swiss group that published the pamphlet and the case
came to trial in 1975. Publicity surrounded the trial and the world press
carried numerous stories about the underlying issues as well as the actua]
proceedings. Recognizing an industry-wide problen1, rather than just a.
problem for Nestle, a group of companies representing about 75 percent
of the world's infant fonnula sales fonned an association called the Inter-
national Council of lnfant Food lndustries (1Cl.Fl). Their first significant
act was to announce a code of marketing conduct that addresed the concerns
of critics.
Three noteworthy provisions were contained in the !Cl.Fl Code:
• Commission payment schemes were banned for milk nurses.
• Milk 11U1'::;es were required to wear an ICIFI pin or badge on their
uniforms so as to inform mothers of their real status.
• Language was adopted that encouraged members to reduce mass media
advertising, although no ban was placed on media promotion.
However, the weakne:mes of the ICIFI Code were so apparent, and so
serious, that one of the founding members, Abbott Laboratories, withdrew.
Abbott promptly developed its own marketing code, which contained sub-
stantially stronger language, including a ban on milk nurses and mass
advertising.
The codes proved no impediment to competitive conduct. Manufacturer::;
were able to continue behaving in substantially the same manner as before.
Medical promotion to clinics and hospitals continued, as did the display of
calendars, charts, posters. and so forth. Some companies even deviated
fron1 their own codes. Most important, nothing in any of the codes re-
stricted the distribution of free samples of infant formula. During the 1970s,
118 JAMES E. POST
sampling-which advertisers know is the most effective means of getting
pP.ople to n~e a product-grew dramatically as a competitive tactic. By
providing large quantities of formula to hospitals and clinics, the companies
secured a means of reaching new customers.
Through the 1970s, the definition of the political issue became more
refined. At U.!::>, ~en.ate hearings that occurred in 19781 ~enator Edward
M. Kennedy, chairman of the Senate Subcommittee on Health and Human
Resources, opened the proceedings with the question: "Can a product,
whose use is permissible and without harm in one social environment, be
safely used in the environment of the developing nations?" lmplied in that
question was the concern to know whether there existed any legitimate
market for formula in the developing world, and whether it could be reached
without the predicted and foreseeable consequence of consumer misuse
and infant hann.
'l11e Kennedy Hearings were a pivotal point in the history of the issue,
signalling an end to the consciousness raising that had dominated until that
t ime and a beginning of the search for effective solutions, Those solutions
wert! not found in the U.S. Congress. The ~enator's staff had diligently
studied the possibilities of legislative or executive agency action. 11tey
were lin1ited at best. The Congress did tie certain foreign aid and Agency
for International Development funding to a requirement that recipient na-
tions develop pro-breastfeeding programs. But it was also recognized that
the behavior of a global industry could overwhelm any individual nation's
commitment to act unless a countervailing political pressure existed, That
countervailing force came to be the World Health Organization and the
pressure would be the Code.
The Nestle .Boycott-T he boycott of .Nestle began in the United States
in mid-1977. From the conclusion of the Nestle trial in S:witzerland at the
end of 1975, it had been apparent that the U.S. was a media-oriented
country. Hence, the story of infant formula marketing-a story of "com-
merciogenic malnutrition" in the words of Dr. Jelliffe-would be taken
more seriously. The Infant Fonnula Action Coalition (INFACT) was estab-
lished in Minneapolis and its small band of members began a campaign to
build public support for a boycott of the world's largest seller of infant
formula products.
INFACT's campaign had two noteworthy successes within a short period
of time. The organization was able to enlist the support and assistance of
the National Council of Churches which, through its own corporate respon-
sibility arm, Iuterfailh Center on Corporate Responsibility (ICCR), had
been pressuring the three U.S. infant formula manufacturers through
shareholder resolutions. In addition, INFACT found an interested staff in
the legislative offices of Senator Edward Kennedy_ INFACT's personnel
worked with Kennedy's staff in the months leading up to the hearings,
doing the myriad tasks t hat hearings require with the knowledge that the
119
hearings would provide an incomparable opportunity for national press
coverage of the issue. As in the Nestle trial in Switzerland, the company
played into the hands of its adversaries. Oswaldo Ballorin, manager of
Nestle's Brazilian operations, claimed that the boycott was actuany an
indirect attack on the free world's economic system Kennedy exploded
in controlled outrage, the TV cameras whirred, and the vignette played
on national news that evening. The U.S. boycott, born only six months
earlier, had won a major victory.
The boycott campaign won its greatest battles for publicity in the U.S.
but it won the battle for policy action in Geneva. Without the concerted
lobbying of boycott supporters in Geneva,. it is doubtful that an international
code of marketing could ever have been developed. Fallowing the Kennedy
hearings, WHO was approached and asked to convene an international
meeting to follow up on the Kennedy initiative. The Director General, Dr.
Halfdan Mahler, agreed. 1n October 1979, an international meeting of
experts on all sides of the controversy was held in Geneva. The recommen-
dations that resulted from the often acid debate included a formal caU for
WHO to take the lead in developing a code of infant formula marketing.
WHO's staff was eager to undertake the effort for a number of reasons.
They w1:n: concerned with the issue itself and believed that a marketing
code might conceivably be a device that could be developed for such
sensitive ~ ~a~ of commercial conflict as the promotion of tobacco and
alcohol in third world nations. With a first draft in hand by January 1980,
there was optimism among WHO staff that a final version might be ready
by the May 1980 meeting of the World Health Assembly (governing body
of WHO). However, their optimism quickly vanished. A series of consulta-
tions with outside experts, industry, and government officials produced
major disagreements over the code's design and terms. A second draft
fared no better, and it was evident that no code would be ready by May
1980. Work continued on the drafting, however, and further consultations
with all parties produced an increasingly precise and acceptable document.
The Carter Administration was involved both formally and informally
throughout tbis process, giving encouragement to WHO at the staff level
while carefully trying to walk a policy tightrope between industry and
boycott interests. Although President Carter was defeated in November
1980, the staff work continued and produced a fourth draft by year's end.
By January 1981, when Ronald Reagan was inaugurated, the executive
board of the World Health Assembly, which included a U.S. representative,
had approved a final draft. This was the draft that would go to the full
World Health Assembly in May for adoption.
The WHO Code- The Reagan Administration was not eager to challenge
the code, but the industry saw an opportunity to scuttle the effort. Lobby-
ists from the three U.S. companies moved to influence the new Administra-
tion. Throughout the Spring of 1981, tensions built as the industry pressed
120 JAMJ::S E. POST
its case to the highest levels of the Administration. Support for the code
was considerable at both the State Department and the Department of
Health and Human Services. Presidential advisor Elliot Abrams was dis-
patched to Geneva to negotiate with Dr. Mahler. The Administration
vigorously argued against a mandatory code of conduct that would require
member governments to implement its provisions, even though it was
clear that a mandatory code was favored by the health ministries of some
developing nations themselves. The U.S. indicated that it would vote
against the Code if it was mandatory. However, Abrams told Mahler that
the U.S. would vote for tlle code if it was merely a "recommendation" to
member governments. Dr. Mahler agreed, knowing that a consensus of
nations was a highly desrrable outcome. Abrams returned to the U.S. with
an agreement Then, only a few days before the actual vote was to occur
in Geneva, with the WHO now officially on record as favoring a recommen•
datory code, the U.S. delegates received instructions directly from the
Whlte House to vote against the code. The vote was 118 nations in favor;
l opposed; 3 abstentions. The U.S. stood alone in its opposition.
The Reagan Administration's vote against the code generated a wave
of criticism. Congressional leaders denounced the Administration's capitula-
tion to the American industry's lobbying efforts. Cartoonists and editorial
writers for newspapers throughout the country poked at the logic of the
Administration's reasoning. One cartoon showed three little pigs (for the
three U.S. companies) sucking at the breast of the Reagan Administration.
The text read: "Mother's Milk!" According to Newsweek, the code vote
represented the J:<.eagan Administration's first foreign policy disaster. The
business press was more favorable to the Administration, with the Wall
Street]ournal running an approving editorial. A few publications speculated
that this might presage the Administration's line of thinking on other issues
of international commerce. lndeed1 the infant formula code vote was the
first in a Jine of Administration actions to oppose such international codes
and arrangements as The Law of the Sea Treaty, t he United Nations Code
on Transnational Corporations, and the UNCTAD Code on Technology
Transfer.
The tirestonn of criticism created new momentum for the boycott cam-
paign. The boycott was a means by which public dissatisfaction with the
Reagan Administration's vote could be dramatized. INFACT developed
the theme in its mailings, and pressed the point that it is easier to pass a
law or a code than it is to make them work in practice. Thus, it was
important to sustain the boycott until it could be determined whether
Nestle would meet the new standard and implement changes in its market-
ing behavior. ironically, Nestle was the only company in the industry to
publicly speak in favor of the WHO Code before its adoption. Management
had publicly committed the company to implement the Code. But for the
Reagan Administration's action, with which Nestle had no part, the boycott
ASSESSING THE NF..STLE BOYCOTT 121
might have ended by mjd-1981. lnstead, public support remained high and
INFACT and the boycott supporters pressed the company to transform
the Code into company policy,
The Commission has not formally addressed such questions as the pro-
priety of Nestle's lobbying of national governments on issues involving the
Code, although it may have been discussed informally. Symbolically, how-
ever, the Nestle public relations apparatus has spoken of the "broad role"
played by the Commission in implementing the Code and responding to
the underlying marketing issues. The Commission's existence is widely
known in the developing world, although its mandate is described in varying
ways by government officials- a fact which may Signal some continuing
confusion about the scope of NIFAC's charge.
The members of NIFAC certainly believe that they are making a good
faith effort to implen1enl Lhe: Nestle instructions and tl1rough them, the
Code. The n:iembers include several leaders of church organizations which
formally supported the boycott. A number agreed to join in order to observe
more closely Nestle's stated commitment to improve its marketing practices.
Others joined because they were asked to serve and believed the issue
sufficiently important to accept the risk of criticism. Not surprisingly, the
commission members have walked a tightrope to not appear to be apologists
for Nestle, yet wishing to acknowledge the company's progress in imple-
menting its commitment to the WHO Code.
NIFAC has been criticized for various reasons, inducting the relatively
limited public health and developing nation experience of its members.
One aspect of the boycott settlement allows the International Nestle
Boycott Committee to nominate several canclidates for positions on the
audit commission. If NIFAC chooses to broaden. its membership by adding
experts in public health, developing nations, and/or corporate social policy,
the additional expertise may be helpful in analyzing the more subtle and
complex issues Hkely to face the commission m the future.
NIFAC's procedures are a matter of special concern. The quarterly
reports issuedJ by the commission paint a picture of thorough investigation
and painstaking review of the facts involved in each complaint. However,
there are tunes when the cormnission's interpretations of the WHO Code
language have differed from those of others. ln its 5th Quarterly Report,
for example, the Commission stated that it interpreted the WHO Code
statement that supplies should be provided only "for infants who have to
be fed on breastmilk substitutes" (Article 6.6) to "include situations in
which a mother chooses not to breastfeed.. " (p. 2) This interpretation was
at odds with the Code and interpretations thereof by WHO and UNICEF.
The result was a Commission position that expanded the meaning of "real
need" far beyond that originally intended by Code drafters. To date, no
mechanism has been devised to reconcile NIFAC's interpretations of code
language with interpretations of others, including international agencies.
Another concern is the analytical approach reflected in the commission's
decisions. These decisions, while appropriately detailed, occasionally dem-
onstrated the interpretive gymnastics that obscure the underlying issue.
ASSESSING TfiJt": Nl!:~TLE BOYCOTT 127
Excessive legalism will leave the WHO Code meaningless, especially if
there is pressure by the company to have NlFAC endorse uinterpretations
of convenience." The Nestle <.:ommission faces the risk of sacrificing the
spirit of the Code for too JegalisLlc interpretation of the terms. Their work
need not become slipshod to reconcile the spirit of the code with the Jette1
of the Nestle instructions. The challenge for NIFAC is to continuously
remind Nestle management that they have committed themselves to make
the WHO Code a "Jiving document," not a search for loopholes and
legalisms. That will be the test of how well the audit commission enhances
corporate accountability.
Con.c lusion
The end of the Nestle boycott brings to a close an important chapter in
modem business history. The boycott helped create an awareness about
the side effects of nonnal marketing and promotional practices. While there
can be no conclusive evidence that the lives of specific individual babies
w~r~ saved as a result, it is clear that hospital practices have been altered,
promotional practices of industry changed, and public awareness of the
130 JAMES E. POST
References
1. James E. Post, Testimony in Marketing and Promotion ofInfant Formula in Developing
Natwns, Hearing-s Before the Subcommittee on Health and Scientific Research of the
Committee on Human .t<esources, 95th Congress 2nd Session, May 23, 1978 (Washington,
V. <.:.: U.S. (;o"eauneot Printing Office), pp. 215-241.
2. J.E. Post, R.A, Smith, and G. Solimano, ''Marketinglnfant Foods in Four Developing
<.:ountries: Trends ~ince the WHO Code," presented at the annual meeting of the American
Public Health Association, November 1983.
3. In l!:.184, .Nestle attempted to acquire Coopervision, a maker of soft contact lenses, and
Carnation, a major food company. At the time of this writing, the Coopervision acquisition.
appears to have failed. The Carnation acquisition is still w1der review by the Federal Trade
Commission.
4. An alternative view is provided by Oliver Williams, "Who Cast the First Stone?" Harvard
.Business Review (September/October 1984), pp. 151-160.