Improving Multinational Corporations and Alliances

IMPROVING MULTINATIONAL CORPORATIONS AND ALLIANCES

A Look Through the Nestle Infant Formula Controversy

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Improving Multinational Corporations and Alliances

Nestle is a multinational nutrition and wellness corporation that operates mostly in the food and beverage industry. It has been regarded as one of the most successful companies in terms of profitability and revenue and has recently been ranked 41st by Forbes magazine as “The world’s most valuable brands” (Forbes, 2015). However, Nestle is not only selling chocolate bars but they are also inadvertently killing innocent babies according to various lobbyists and individuals. The company that has served countless consumers for over 100 years, has also been the target of advocacy groups, government regulatory agencies, and the concerned public over their various business strategies; none more infamous than the marketing techniques used by them, especially in third world or developing countries,  to promote infant formula. A decades long lasting boycott, new governmental regulations over international marketing standards, and legal ramifications have all come against Nestle over the claim that they have recklessly contributed to the suffering and even deaths of infants around the world. The severity of this controversy, along with the public outrage and criticism towards a once seen “household” brand, forced government agencies to enforce regulations on multi-national corporations and how they advertised to the “vulnerable”. Both government and corporations always take a reactive approach to handle new issues. In this paper I will argue that a proactive proposal and policies could have been initially constructed to allow more knowledge and transparency between the government, business, and the public.

In the late 1970’s and more increasingly throughout the 80’s Nestle was seen by a legion of individuals and organizations as a heartless enterprise fixated on profits through the suffering of the innocent. The innocent being the children of underdeveloped countries. Nestle having one of the biggest market shares in the infant formula industry at time and mixed with one of the biggest advertising campaigns were extremely scrutinized.  Specialized agencies of the United Nations such as the World Health Organization and UNICEF, as well as nongovernmental organizations like Infant Formula Action Coalition (INFACT), claimed that Nestle was providing misleading advertising information, giving out free samples, and unethical marketing strategies to promote their products to people in areas that lacked information and any regulation against it (INFACT CANADA, 2014). Their main product being infant formula, which has been proven by industry experts to be an inferior substitute for natural breast milk and requires an adequate and hygienic water supply for substance dilution, which many of these underdeveloped places do not have.  It was “The Baby Killer”, a booklet published by London UK’s War on Want organization in 1978 that opened up the controversial discussion on the infant formula industry by focusing on “one aspect of urbanisation and its effect on women’s attitudes towards breast feeding: the role of the baby food industry and the commercial promotion that it employs” (Muller, 1974). This brought national and universal attention on what was happening with multinational companies and their advertising techniques used worldwide. Along with “Babies mean Business”, published by the New Internationalist, the public was shown how Nestle has been increasing their earnings with imploring unfavourable business tactics and policies, such as “creating needs where none existed, convincing consumers that their product is indispensable, linking the product with unattainable concepts, and then providing free samples”. (Business Insider, 2015) Divided these concepts seem like usual marketing strategies that can be read in any university textbook but combined with a mixture of vulnerable and ignorant individuals, these concepts can take advantage of others. Also, they provide an alarming framework for how businesses operate among different regions with different or less standards of care to their citizens.