Nestle Swot Analysis

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CASE 1-2

Nestle: The Infant Formula Controversy



Nestle Alimentana ofVevey, Switzerland, one of the world's largest food-processing companies with worldwide sales of over $8 billion, has been the subject of an international boycott. For over 20 years, beginning with a Pan American Health Organization allegation, Nestle 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 28-page 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 "Nestle Kills Babies," and accused Nestle of unethical and immoral behavior. Although there are several companies that market infant baby formula internationally, Nestle 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 Nestle.

on the intensive advertising and promotion of infant formula. Clever radio jingles extol the wonders of the "white man's powder that will make baby grow and glow.""Milk nurses" visit nursing mothers in hospitals and their homes and provide samples of formula. These activities encourage mothers to give up breast feeding and resort to bottle feeding because it is "the fashionable thing to do or because people are putting it to them that this is the thing to do."

The following points are made in defense of the marketing of baby formula in Third World countries: . First, bottle carry states Nestle argues that the company has never advocated feeding instead of breast feeding. All its products a statement that breast feeding is best. The company that it "believes that breast milk is the best food for

infants and encourages breast feeding around the world as it has done for decades." The company offers as support of this statement one of Nestle's oldest educational booklets on "Infant Feeding and Hygiene," which dates from 1913 and encourages breast feeding. . However, the company does believe that infant formula has a vital role in proper infant nutrition as a supplement, when the infant needs nutritionally adequate and appropriate foods in addition to breast milk, and as a substitute for breast milk when a mother cannot or chooses not to breast feed. One doctor reports, "Economically deprived and thus dietarily deprived mothers who give their children only breast milk are raising infants whose growth rates begin to slow noticeably at about the age of three months. These mothers then turn to supplemental feedings that are often harmful to children. These include herbal teas and concoctions of rice water or corn water and sweetened, condensed milk. These feedings can also be prepared with contaminated water and are served in unsanitary conditions." . Mothers in developing nations often have dietary deficiencies. In the Philippines, a mother in a poor family who is nursing a child produces about a pint of milk daily. Mothers in the United States usually produce about a quart of milk each day. For both the Filipino and U.S. mothers, the milk produced is equally nutritious. The problem is that there is less of it for the Filipino baby. If the Filipino mother doesn't augment the child's diet, malnutrition develops. Many poor women in the Third World bottle feed because their work schedules in fields or factories will not permit breast feeding. The infant...
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