NESTLÉ ETHICS VIOLATION

NESTLÉ'S ETHICS VIOLATION

$3.25

Tuesday, April 7, 2015

Vol XCIII, No. 311

Code of Business Conduct

Profile: The Nestlé Company

• We respect the law at all times
• We will always act in the best interests of Nestlé
• We take pride in Nestlé's reputation and consider Nestlé's best interests also in our outside engagements and activities
• We believe in the importance of free competition
• We are committed to advance Nestlé's business
• We condemn any form of bribery and corruption
• We embrace diversity and respect the personal dignity of our fellow employees
• We take responsibility for ensuring that we all act with integrity in all situations

• We respect and follow the Insider Trading Rules when buying or selling Nestlé securities
• Our hiring and people development decisions will be fair and objective
• We value and protect our confidential information and we respect the confidential information of others
• We insist on honesty and we respect the Company's assets and property
• We compete and do business only on quality and competence
• We will consult with the Code, comply with its provisions and seek guidance when needed

• Founded in 1867 by Henri Nestlé, a German Pharmacist
• Originated in Switzerland
• Headquarters in Switzerland and operations in more than 197 countries
• 14 members of the Board of Directors led by Chairman Peter Brabeck-Letmathe
• Current CEO: Paul Bulcke
• CEO at time of incident: Helmut Maucher

Social Responsibility

• Nestlé Cocoa Plan
• Launched in March 2011, in Côte d'Ivoire, Africa
• Investing $120 million over next ten years
• Five key pillars: farmer education, sustainability, supply chain efficiency, improving social conditions and working with partners
• Founding partner of Kids Help Phone
• Works with food banks and supporting programs like Feeding Families to give guidance and ensure that families are eating well, regardless of life circumstances
• Supports a variety of community groups, such as:
• Anaphylaxis Canada, Boy Scouts / Girl Guides, Canadian Breast Cancer Foundation and Society, Canadian Red Cross, Humane Societies, Ontario Brain Institute, Parkinson's Foundation, Ronald McDonald House, Tim Horton's Children's Foundation and the United Way
• Looks for ways to reduce packaging and improve environmental performance while ensuring quality and freshness
• In 2013, Nestlé saved: 10,336 kg of cardboard 20,678 kg of flexible film (used as wrappers)

Slogan: Good Food, Good Life

The Scandalous History Of Infant Formula

Outcome

• In exchange for handing out "discharge packs" of formula, hospitals received freebies like formula and baby bottles
• In the Third World, women tried to save money by diluting the formula
• Millions of babies died from malnutrition
• Reliance on baby formula blamed for a million infant deaths every year
• Hindered infant growth in general
• The allegations led to hearings in the Senate and the World Health Organization, resulting in a new set of marketing rules.
• Yet infant formula remains a $11.5-billion-and-growing market.

• Global boycott (suspended in 1984, but resurfaced in the late 1980s)
• Nestlé suffered a $40 million loss
• Nestlé used $20 million to follow all the rules and conditions in the World Health Organization's Code of Marketing for Breast Milk Substitutes
• Nestlé chose the Methodist Task Force on Infant Formula to investigate the death of babies due to their infant formulas
• Offered to donate $1 million to Save the Children Foundation
• Nestlé's revenue has been inconsistent in the past 5 years but generally, it's positive trend

• 1970s: Nestle accused of getting third world mothers hooked on formula
• "Nestlé accomplished this in three ways:
• Creating a need where none existed
• Convincing consumers the products were indispensable
• Linking products with the most desirable and unattainable concepts—then giving a sample"
• Benefits of breastfeeding
• Vitamin A prevents blindness and lowers a child's risk of death from common diseases
• Zinc might stave off diarrhea
• 6 months of exclusive breastfeeding are said to increase a child's chance of survival by six times

Sources

Conclusion

• www.nestle.com
• www.corporate.nestle.com
• www.nestle.com/investors/corporate-governance/codeofbusinessconduct
• money.cnn.com
• www.businessinsider.com
• www.theguardian.com
• www.babymilkinaction.org

Nestle was not acting socially responsible because:

• Broke their own code of conduct
• Dishonest
• Did not act with integrity
• Acted in best interest of Nestle regardless of the lives of innocent people