PR Case Study of Nestle Baby Formula Scandal

Summary

The transcript discusses a decades-long conflict between two corporate giants, Bristol Meyers and Nestle, over the marketing of infant formula in developing countries. Criticized for promoting formula over breastfeeding in areas with poor hygiene and lack of clean water, both companies faced backlash from health and religious organizations. Despite their attempts at crisis management and responses to regulations, boycotts and activism continued. The World Health Organization and UNICEF later introduced guidelines to restrict formula marketing, leading to significant changes in hospital practices and breastfeeding rates worldwide. However, controversies around the issue persist into the modern day.

Takeaways

• 😀 Companies like Bristol-Myers and Nestlé faced significant criticism in the 1970s for promoting powdered infant formula in developing countries where poor sanitation contributed to infant malnutrition and mortality.
• 😀 The marketing tactics used by these companies, such as employing 'milk nurses' in hospitals, led to widespread backlash from health and activist organizations.
• 😀 Critics argued that the infant formula promoted by these companies required mixing with unclean water, which exacerbated health risks for infants in poverty-stricken regions.
• 😀 Breastfeeding was advocated by the UN and the World Health Assembly as the ideal method for infant nutrition, due to its safety and health benefits compared to formula feeding.
• 😀 In response to public pressure, Bristol-Myers prepared a report to stockholders detailing the negative effects of its formula marketing in developing countries.
• 😀 Nestlé responded more proactively by forming the International Council on Infant Food Industries and developing a code of ethics for infant formula promotion.
• 😀 Despite Nestlé's proactive response, the company faced boycotts, including a campaign that encouraged consumers to avoid all Nestlé products until the company changed its marketing practices.
• 😀 In the 1980s, the World Health Organization (WHO) introduced the International Code of Marketing of Breast-milk Substitutes to restrict unethical formula marketing practices like giving free samples to mothers.
• 😀 The Baby Friendly Hospital Initiative, launched by UNICEF and WHO in 1992, aimed to promote breastfeeding and prevent the distribution of free or discounted formula in maternity hospitals worldwide.
• 😀 Despite improvements, controversies over the marketing of infant formula continued into the 2000s, with accusations that Nestlé and other companies were still violating WHO guidelines, though Nestlé defended its practices.

Q & A

What were the main criticisms against Bristol Myers and Nestle in the 1970s?

Bristol Myers and Nestle faced criticism for promoting powdered infant formula over breastfeeding in developing countries. The criticisms included the health risks of mixing formula with unclean water, malnutrition, and increased infant mortality rates, as well as exploitative sales tactics such as using milk nurses to promote formula in hospitals and homes.

How did Bristol Myers respond to the backlash from critics?

Bristol Myers initially denied responsibility for the formula scandal but eventually agreed to report on its sales and marketing activities. The company discontinued consumer advertising, stopped using milk nurses, and made concessions under pressure from the SEC, including submitting detailed reports to stockholders.

What actions did Nestle take in response to the backlash over its formula marketing?

Nestle took a proactive approach by forming the International Council on Infant Food Industries, publishing a code of ethics, and working with health groups to explain that infant malnutrition was due to poverty and poor sanitation, not formula. However, their efforts were met with boycotts, and they eventually agreed to stop supplying free formula to hospitals.

What was the role of the World Health Organization (WHO) in addressing the infant formula issue?

The WHO played a key role in addressing the issue by establishing the International Code of Marketing of Breast-Milk Substitutes in the 1980s, which restricted companies from giving out free samples, using mothercraft nurses, and idealizing formula use. This code aimed to promote breastfeeding as the ideal method of infant nutrition.

What was the Baby Friendly Hospital Initiative (BFHI), and how did it impact formula promotion?

The Baby Friendly Hospital Initiative, launched in 1992 by UNICEF and WHO, aimed to support breastfeeding and stop the distribution of free or low-cost formula in maternity hospitals. As a result, many hospitals worldwide adopted practices supporting breastfeeding, leading to significant increases in breastfeeding rates in countries like China, Nicaragua, Poland, and Zambia.

How did Nestle's stance evolve over the years regarding its formula marketing practices?

Nestle's stance evolved significantly, especially after 1982, when it adopted the WHO code's principles as company policy. The company stopped consumer advertising, ceased offering free samples to mothers, and removed pictures of infants from product labels. Despite these changes, Nestle faced ongoing criticism and boycotts in the following decades.

What were the main objectives of the Infant Formula Action Council (IFAC)?

The Infant Formula Action Council was formed to boycott Nestle products in protest of its formula marketing practices. The council aimed to change Nestle's policies on formula promotion, including stopping free samples in hospitals, direct consumer advertising, and unethical sales tactics in developing countries.

How did Nestle respond to the criticisms and accusations in the 2000s?

In the 2000s, Nestle responded to criticisms by publishing reports defending its compliance with the WHO Code and highlighting its Corporate Social Responsibility efforts, such as the Healthy Kids program. They continued to work with international agencies to address infant nutrition issues but faced persistent challenges and accusations from advocacy groups.

What role did poverty and poor sanitation play in the debate over infant formula use in developing countries?

Poverty and poor sanitation were central to the debate, as many critics argued that the use of powdered formula in developing countries, where clean water was scarce, contributed to malnutrition and infant mortality. Nestle and other companies, however, argued that many infants needed formula supplementation due to inadequate maternal nutrition.

What are the long-term impacts of the Baby Friendly Hospital Initiative?

The Baby Friendly Hospital Initiative has had significant long-term impacts, particularly in developing countries, by increasing breastfeeding rates and improving infant health. It has led to improved hospital practices, reduced reliance on formula feeding, and more support for breastfeeding as the preferred method of infant nutrition.