Friday, November 03, 2006

Waiting to applaud

Where are we after yesterday? Ah, yes. Baby food companies are called on by the World Health Assembly to abide by marketing requirements independently of whatever governments may do. And they can comply where they are forced to do so by legislation. But without enforcement, it is another story. Why? Because where the measures are enforced sales are hit, and if they companies comply voluntarily then there is always a danger less scrupulous competitors will steal their customers.

It happens. In the United States there used to be a voluntary agreement between the formula companies and the American Academy of Pediatrics banning advertising of formula to the general public. Companies were restricted to providing information to the medical profession, which is responsible for advising parents. When Nestlé entered the market it challenged the agreement in the courts and, as it had no legal basis, ignored it. As reported in the Archives of Pediatrics:

"In 1988, Nestle (absent from the US infant formula industry since the 1940s) acquired the Carnation Company and launched an advertising campaign to the general public for its formula products. Bristol Myers/Mead Johnson, in cooperation with Gerber Products Company, quickly followed suit. These actions threaten to once again remove the realm of infant feeding from the exclusive supervision of the medical profession. The new multimedia public advertising campaigns may increase the cost of infant formula to the general public and have a negative impact on the incidence of breast-feeding. In addition, formula advertising campaigns will likely increase the danger of advertising hyperbole.."

Boycott coordinators have the experience of Nestlé agreeing to abide by the marketing requirements in 1984 and suspending the boycott only to find the company broke the agreement. The boycott was resumed in 1988. I found this report of the resumption of the boycott in the US available on the internet.

We have learned from that experience. The plan for ending the boycott next time requires Nestlé first to accept the validity of the World Health Assembly marketing requirements and that it has to change its policies and practices to bring them into line. At present it claims no changes are necessary, that it is complying. As a third step boycott coordinators would discuss with Nestlé its timetable for change. Once monitoring on the ground found no violations for 18 months, the boycott would be called off. Nestlé has rejected this four-point plan and hasn't even got past the first point of accepting the validity of the marketing requirements, despite repeated requests for it to do so.

One ethical investment listing is trying a similar strategy. Similar, but different, as companies will make the approved list on the basis of bringng their stated policies into line and clearly demonstrating the presence and application of management systems and reporting on external verification. That is audits commissioned and presented by the company. The criteria give companies time to deliver on these promises, so a company will be listed even if violations are known to be on-going. The approach is concerned with policies and systems rather than what comes out at the end, the marketing strategies on the ground.

Most companies are not even engaging with this process, an indication of how far their policies and management systems are out of step. But one company has jumped through the necessary hoops and made it onto the list. It is Novartis, owner of Gerber baby foods. We are taking a 'wait and see' approach to the strategy. We find Gerber violations continue even today on its website and have recent evidence of other prohibited practices in places such as China. We are targeting these with our Campaign for Ethical Marketing action sheet. Hopefully, Gerber will respond to campaign supporters by saying its reformed system will stop this malpractice in pretty short order. That will be a signal that its commitments have worth. We are also concerned Gerber is one of the countries currently trying to overturn baby food marketing regulations in the Philippines. Companies in the Index are reviewed every 6 months and are subject to deletion if they are considered not to be continuing to make sufficient progress in all the criteria areas.

So Novartis is the best in the class in terms of what it has told the listings investigators it will do.

The question now is, how long till we can applaud it for complying?

2 comments:

lisa said...

Just to let you know that I am still thoroughly enjoying reading your posts, and learning all the time, Thanks Mike

Mike Brady said...

Gerber has since been taken over by Nestlé and there is little hope that Nestlé will honour the commitments given by Novartis to end Gerber violations.

See:
http://boycottnestle.blogspot.com/2007/04/little-hope-for-gerber-changes-with.html