Reference no: EM132198184

Nestle and the ongoing infant formula controversy

Nestlé was one of the most successful food-based companies in the world. Set up by Henri Nestlé in 1867, in Vevey, Switzerland, Nestlé grew over the decades by acquiring smaller companies to become the largest company in Switzerland by the 1960s. Nestlé's product portfolio included soluble and roast coffee, other beverages like tea and health drinks, several mineral water brands, dairy products, chocolates and confectionery, ice cream, frozen food, culinary products, breakfast cereals, infant food, pet care, pharmaceutical products and cosmetics. By the end of 2002, the company employed more than 250,000 people in 508 factories around the world. Although it was one of the most successful companies in the world, Nestlé was frequently criticized for using unethical marketing practices to promote the sales of some of its products.

It was ironical that the biggest controversy in Nestlé's history involved the product on which the company was built. Critics said that Nestlé had promoted the use of infant milk formula (which many experts believed, was harmful to the health of the mother as well as the child), in developing countries, in an unethical manner. The company was criticized particularly for its promotions which implied that women in westernized countries routinely used the formula as a substitute for mother's milk. It was also alleged that Nestlé subtly developed the belief that using the formula was more beneficial to the mother as well as the child. This type of promotion was in violation of the 'International Code of Marketing Breast-Milk Substitutes' of the WHO /UNICEF...

The company was severely condemned by health agencies around the world for its marketing of infant formula in developing countries, by conveying the message that the formula was better for babies than mothers' milk.

For Discussions

1. Set out the ethical criticism of Nestlé’s marketing of infant formula. Which consumer rights are these practices failing to respect?

2. What is the impact on a company's image and credibility?

3. What are the major abuses of advertising by Nestle from your own observations and experiences?

4. Discuss the ethical elements that can help corporations to better understand the issue of product quality.