The Tale of Nestle and a Nation in Famine


Here’s one straight out of the twilight zone of Dicken’s worst nightmares.

Nestle Corporation, which last year earned 5.5 billion dollars in profits is demanding 6 million dollars from Ethiopia, a country facing famine. That over 14 million people are in danger of dying of starvation in a country so poor (an average income of less than $2 per day) that it can’t afford to buy enough food on the overabundant world market doesn’t seem to bother the world’s largest food corporation. Hey, business is business!

“But wait!” you cry in disbelief, “There must be more to the story than this!”. Ok, here’s the low-down. In 1975 a military dictatorship took over Ethiopia and nationalized the Ethiopian Livestock Development Company, or ELIDCO for short. ELIDCO was partially owned by Schweisfurth Group, a german company which Nestle acquired in 1986. In all likelihood, Nestle purchased Schweisfurth at a price that reflected the loss of ELIDCO 11 years earlier. In 1998 the current democratically elected government of Ethiopia, in heavy debt to international creditors, sold ELIDCO for 8.73 million dollars. Last year the World Bank placed it’s giant footprint into the fold – Nestle wanted “their” money back. That the total annual sales of Nestle dwarfs the GDP of famine struck Ethiopia (by a factor of 8) was obviously not a consideration to either the World Bank or Nestle.

Of course, the Ethiopian government is not made up of saints here. The war with Eritrea caused massive death and is one of the underlying factors leading to this famine, even if the main factor is a 3 year drought. In all likelihood, the country is also rife with corruption. Irregardless, the 14 million individuals in danger of starving aren’t responsible for that – they are just the rag puppets cast aside in that deadly game called Greed and Power. Not that this is surprising. Greed and Power lie behind “epidemics” of premature death (like war and starvation and disease) which regularly strike the poor and downtrodden on this planet. And, Nestle has got that addiction to Greed in a big and very bad way.

But what about common sense or common decency? That you don’t force money from the hands of people who are starving, especially when you are rich beyond avarice, is obvious to anyone older than 2 who has ever heard of Scrooge. I mean, beyond the obvious morality, just the bad PR this is gonna generate will end up costing Nestle more than 6 million. Think of the good PR Nestle could have generated if they had done the opposite – made a big declaration that they were gonna write off their debt to a country caught in the arms of famine. Hey, Merry Christmas and A Happy New Year! But “No!”, “No!”, And once again, “No!” It appears that Nestle has very strong guiding principles about this sort of thing – “Squeeze every last penny out of them!” And be sure you get it before death reduces the swell of their children’s bellies so that it matches the rest of that skin on skeleton look.

This isn’t the first time Nestle has walked the pathway of moral putridity. For years Nestle has been the target of boycotts due to their decades long practice of underhandedly peddling baby formula as a breast-milk substitute to mothers in the third world. Breast milk is free, healthy and protects against infection, but not very profitable for a maker of baby formula. Practices like sending sales reps into hospitals dressed as nurses to promote products to mothers were common place. The pitch was that Nestle’s formula was better than breast milk – in fact, any mother that “really” cared about her baby would use Nestle breast-milk substitute. Mothers were often given a free supply of baby formula that lasted just long enough to dry out their own breast milk. These mothers, lacking sanitized water, and with their breast milk now dried up, mixed the formula with the only water they had. The results were predictable. According to the World Health Organisation a child bottle fed using unsafe water is up to 25 times more likely to die as a result of diarrhea than a breast fed child. 1.5 million children die in this manner each year. With pressure from the boycott, Nestle agreed to abide by the World Health Organisation’s (WHO) International Code of Breastmilk Substitutes, but Nestle has continually violated the Codes. IBFAN detailed code violations by infant food manufactures in a report called “Breaking the Rules 2001” – released to coincide with the 20th anniversary of the International Code. While Nestle was not the only manufacturer to violate the Codes, Nestle’s violations were the only ones to be presented in special tables “because of the sheer volume of its violations”.

In 1984 Ethiopia was struck by a famine in which a million people died. Even today more than a tenth of its children die before their first birthday, and almost half of all children are underweight. It has the lowest per capita income in the world, with the average person surviving on $100 a year. Still, the Ethiopian government has offered to pay Nestle 1.5 million dollars in order to settle the claim. Nestle rejected this offer and demanded 6 million dollars “as a matter of principle”. Their press release defended this demand, “In the interest of continued flows of foreign direct investment which is critical for developing countries, it is highly desirable that conflicts are resolved according to international law and in a spirit of fairness.”

According to Oxfam, 6 million dollars could do the following in drought ravaged Ethiopia: – buy food for a month for over 1 million people in Ethiopia. – build 6,500 wells which would provide clean water to more than 4 million people – provide 650,000 people with medicine to fight diarrhea

And what would the cost be to Nestle? – 6 million dollars is 0.01% of Nestle’s annual turnover.

Criticism of Nestle’s business activity prompted Peter Brabeck-Letmathe, their chief executive, too acknowledge the need for responsibility beyond profit when he said, “We are going to be asked: what have you done to fight hunger in developing countries?”. That was three years ago. The guy is still heading the company, and as you can see, not much has changed when it comes to grasping basic concepts like Ethics and Morals at Nestle corporation. It’s still that same old insatiable greed – need indeed! Clearly an absolute prerequisite for the job of CEO at Nestle is that your heart be made out of burnt asphalt.

So unless you are a chum supporter of infant mortality or famine then you might want to boycott Nestle and the long long list of companies it owns.

And while your at it, give a real generous gift for christmas – donate to one of the many charities trying to help the 38 million people facing famine in Africa.

Peace, Kevin

Note: The International Code of Marketing of Breast-milk substitutes was adopted by the World Health Assembly in 1981. It aims to protect all mothers and babies from aggressive company practices and to ensure that they receive accurate information. It bans all promotion of baby milks and other breastmilk substitutes.

KEVIN BEGLEY lives in Lund, Sweden He can be reached at: kevin.begley@spray.se


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