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Nestl: The Infant Formula Controversy

Case Study

Questions:
1. What are the responsabilities of the companies in this or similar situations?
2. What could Nestle have done to have avoided the accusations of killing
Third World babies and still market its product?
3. After the Nestles experience, how do you suggest it, or any other
company, can protect itself in the future?
4. Assume you are the one who had to make the final decision on whether or
not to promote and market Nestles baby formula in Third World countries.
Were the decisions socially responsible? Were they ethical?
5. What advice would you give to Nestle now in light of the new problem of
HIV infection being spread via mothers milk?

1. Responsabilities of Nestle in this situation


Nestle should sponsor and organize events like international
medical and nutrition conferences; events like:
o International Day of Families which is observed on the
15th of May every year.
o Australian Family & Community Day
o Family Day - public holiday celebrated in South Africa
Also the multinational should conduct and fund research on
infant nutrition;
Nestle must support the entire World Health Organization code;
They should continue to issue intructions to all employees, agents
and distributors to implement the WHO code in all Thrid World
countries;
They should keep a low price in Thrid World countries;
2. How to avoid the accusations
They should encourage breast feeding and point out that the
infant formula should be used only in special situations. This kind
of situations can be found in countries like Philippines where the
mother can have dietary deficiencies and need to augment the
childs diet;
Also they should offer free HIV testing and encourage mothers to
take the HIV test and then decide how they will feed their babies;
3. Protect company in the future
Before a company enters a new market, especially a sensible
market like Third World countries, they should should develop
studies about the country culture, economic conditions, medical
and psychological effects of their products;

4. Decisions socially responsible? Ethical?


First of all the company shouldnt market the product in a country
where the people are incapable to safely prepare the formula for
babies;
Also, they shoulds encourage mothers to use the bottle-feeding
method when they can perfectly breast-feed their kids
5. Advices HIV infection
They should encourage HIV testing
They should sponsor research on how to decrease the risc of
mother-child transmition of the virus
The company should support breast feeding