NESTLE

CASE: THE INFANT FORMULA CONTROVERSY

 COMPANY BACKGROUND

• A MULTINATIONAL MANUFACTURING CORP. (MNC) HEADQUARTERED IN VEVEY, SWITZERLAND

AND ESTABLISHED IN 1905.
• THE COMPANY STARTED WITH CONDENSED MILK AND INFANT FORMULA
• FACTORIES IN MORE THAN 80 COUNTRIES
 DEVELOPMENT OF NESTLE

• 1866 – FOUNDATION OF ANGLO SWISS CONDENSED MILK CO. BY THE PAGE BROTHERS OF THE UNITED
STATES
• 1867 – HENRI NESTLE INFANT CEREAL WAS DEVELOPED
• 1905 – NESTLE AND ANGLO SWISS CONDENSED MILK CO. (NEW NAME AFTER MERGER)
• 20TH CENTURY – DIVERSIFICATION (CHOCOLATE, CHEESE, COFFEE, BOTTLED WATER, PETCARE, ICE CREAM
• 1929 – MERGER WITH PETER, CAILLER, KOHLER CHOCOLATS SUISSES S.A (MILO AND NESCAFE)
• 1947 – NESTLE ALIMENTANA S.A (NEW NAME AFTER MERGER WITH MAGGI)
• 1977 – NESTLE (NEW COMPANY NAME)
 MISSION
“MAKE BETTER FOOD SO THAT PEOPLE LIVE A BETTER LIFE”

VISION
TO BRING CONSUMER FOODS THAT ARE SAFE, OF HIGH QUALITY AND PROVIDE OPTIMAL
NUTRITION TO MEET PHYSIOLOGICAL NEEDS. IN ADDITION TO NUTRITION, HEALTH AND WELLNESS,
NESTLE PRODUCTS BRING CONSUMERS THE VITAL INGREDIENTS OF TASTE AND PLEASURE’’
 THE INFANT FORMULA CONTROVERSY

• A. DEATH OF THIRD WORLD INFANTS

1974 - BRITISH JOURNALIST MIKE MULLER PUBLISHED A REPORT -DEATH OF THIRD WORLD INFANTS
THIRD WORLD WORKING GROUP - “NESTLE KILLS BABIES”
NESTLÉ, INFANT FORMULA, & DEVELOPED COUNTRIES
• FORMULA FOUND ITS WAY TO AMAZON TRIBE - JUNGLE OF PERU.
• HIGHLY CONTAMINATED RIVER AS WATER SUPPLY.
• FORMULA DILUTED TO STRETCH THEIR SUPPLY.
• DECREASE IN THE INCIDENCE OF BREAST FEEDING
• NURSES PROVIDING SAMPLE TO MOMS IN HOSPITAL.
 HIV INFECTED MOTHER

• 2001 - 3.5M WORLDWIDE HAD CONTRACTED HIV AT THEIR MOTHER BREAST, 90%
DEVELOPING COUNTRIES
• CONCERS; SWITCH TO THE BOTTLE JUST TO BE SAFE OR CONTINUE TO BREASTFEED TO AVOID
BEING STIGMATIZED
 STATEMENT OF THE PROBLEM
A. HOW SHOULD NESTLE RESPOND TO THE FOLLOWING
1. BAD PUBLICITY OR ISSUE OF DIFFERENT ORGANIZATION,
2. HIV/AIDS ISSUES,
B. WHAT COULD NESTLE HAVE DONE IN MARKETING THEIR INFANT FORMULA TO 3RD WORLD
COUNTRIES.
C. WHAT SHOULD OTHER COMPANIES DO TO PROTECT THEMSELVES IN THE FUTURE.
• FOR OVER 20 YEARS, NESTLÉ HAS BEEN DIRECTLY AND
INDIRECTLY CHARGED WITH INVOLVEMENT IN THE DEATH OF
THIRD WORLD INFANTS IN 1974, A REPORT WITH A PAMPHLET
ENTITLED “ NESTLÉ KILL BABIES” IS PUBLISHED.
• THE CHARGES MOST OF THE CHARGES AGAINST INFANT
FORMULAS FOCUS ON THE ISSUE OF DISCOURAGED BREAST
FEEDING AMONG THIRD WORLD MOTHERS AND HAVE LED TO
MISUSE OF THE PRODUCTS, THUS CONTRIBUTING TO INFANT
MALNUTRITION AND DEATH.
 STRENGHTS
•MARKET LEADERSHIP
•STRONG BRAND
•FINANCIAL STABILITY
•R&D CAPABILITY
 WEAKNESSES

• LACK OF FORESIGHT/PLANNING
• SMEARED IMAGE
 OPPORTUNITIES

• VALID NEED FOR A NUTRITIONAL SUBSTITUTE TO BREASTFEEDING

• GROWING POPULATION
• FINDING ON HIV TRANSMISSION VIA BREAST MILK
 THREATS

• RIVALS/COMPETITORS
• CONTINUOUS NEGATIVE ATTACKS AND ACCUSATIONS FROM VARIOUS GROUP
 ALTERNATIVE COURSES OF ACTION
1. ADDRESS BAD PUBLICITY
• FUND RESEARCH ON INFANT FEEDING
• CONTINUE STRICT COMPLIANCE TO THE WHO
• SUSPEND CONSUMER ADVERTISING & DIRECT SAMPLING FOR MOMS.
• CONTINUE EFFORT ON SOCIAL RESPONSIBILITY BY SPONSORING EVENTS
FOR HEALTHY PREGNANCY, MEDICAL & NUTRITION CONFERENCES AND
EVENTS LIKE CELEBRATING FAMILY DAY
• BECOME INVOLVED W/ THE BABY-FRIENDLY HOSPITAL INITIATE
 ALTERNATIVE COURSES OF ACTION

2. TO ADDRESS ISSUES WITH HIV

• PREVENTION OF HIV-INFECTION DURING BREASTFEEDING BY RECOMMENDING THAT IF A
PATIENT HAS HIV, FORMULA SHOULD BE USED PARTNERSHIP WITH GOVENMENT TO SELL MILK
AT DISCOUNTED PRICES TO HIV POSITIVE MOTHERS.
 ALTERNATIVE COURSES OF ACTION

3. WHAT COULD NESTLE HAVE DONE TO AVOID THE ACCUSATIONS.

• USED GLOBAL MARKET MODEL, ADAPT STRATEGIES THAT ARE COST EFFECTIVE CULTURALLY
APPROPRIATE.
• PROMOTE BREASTFEEDING AND BEENMORE CLEAR THAT INFANT FORMULA IS ONLY
SUPPLEMENTARY.
• CONDUCTING MORE INTENSIVE RESEARCH PRIOR ENTERING A NEW MARKET.
 RECOMMENDATIONS

SUGGESTING TO PROTECT COMPANY ON THE FUTURE BEFORE NESTLE OR ANY ENTERPRISE

ENTER TO THE NEW MARKET, THEY HAVE TO UNDERSTAND WELL ABOUT THE TRADITION, LIFE
STYLE, ECONOMIC STATUS, NATURAL CONDITIONS…THEY SHOULD DO MORE STUDY ABOUT
MEDICAL EFFECTS OF THEIR PRODUCT AND SERVICES BECAUSE THEY PROVIDE SUCH AN
IMPORTANT FOR HUMAN BEINGS. WHEN THEY DO BUSINESS, THEY SHOULD NOT ONLY CARE
ABOUT MAKING PROFIT BUT ALSO THEIR CONSUMER. FOR PEOPLE IN THIRD COUNTRY, THESE
COMPANY SHOULD DO PROMOTING IN HEALTHY EATING HABIT FOR MOTHERS DURING HER
PREGNANCY AND THEN BABY. DOCTORS IS REALLY NEEDED FOR SOME URGENT SITUATIONS.