Nestle Case Study

It is an ethical duty of a corporation to promote social justice. A company needs to integrate Corporate Social Responsibility as their political ideology into their everyday business operations. Nestlé’s Infant Formula controversy is a classic example of what happens when a company fails to adhere to the Corporate Social Responsibility. This incident raises several issues important to all multinational companies.

Nestlé Infant Formula Controversy

The field of medical science is so advanced today, that there is a medicine/cure for almost every ailment. But as the old adage goes ‘Prevention is better than cure’. There is sufficient scientific evidence to support the fact that breast-feeding an infant will provide the child with immunity to infections and diseases for its entire life. And it is near impossible to re-create the supreme quality and power of breast milk in any formula. However in the mid 1860s Henri Nestlé made an effort and succeeded in developing a milk substitute to help infants who could not be breast-fed for whatever reasons. The formula had the closest consistency of breast milk and could be easily digested by newborns. This helped save the lives of several babies. For example, the formula was used at refugee camps to feed starved infants by the International Red Cross association. [2]

Nestlé had the first mover advantage in the world of Infant Formula and gained considerable market share and became one of the largest producers of the baby formula. However, a controversy surrounding Nestlé’s marketing of Infant Formula was started when the company was held responsible for the deaths of many infants in the third world countries. It was not the Infant formula by itself that caused the deaths of the infants; it was the way the product was used. For example, see [1]

- A study by the Peruvian nurse reported that the only water that was available for use was the highly contaminated river water. Same water was used for formula feeding, laundry and toilets. The babies who were formula fed were suffering from recurring diarrhea and vomiting.

- The formula was so expensive that most of the users in the under developed countries diluted the formula mixture to make it last longer. It was more like formula flavored water.

- A doctor in a rural area reported that a newborn baby that weighed about 7 pounds at birth weighed around 5 pounds at 4 months. The baby’s sister, a toddler who weighed 12 pounds before, later weighed only 8 pounds. He reports that these children were never breast-fed. When asked the mother, said that she was using one can of formula for two weeks between the two kids. Where as for a four-month-old baby, one container of formula should have lasted just under three days.

- In Brazil the formula was one of the highly advertised products in the country next to cigarettes and