Friday, December 15, 2006

Nestlé, Novartis Medical Foods, Gerber and food for thought

Yesterday it was announced that Nestlé was buying Novartis Medical Nutrition for the sum of US$ 2.5 billion. That will be a fun cheque to write - and receive. It does need approval by regulatory authorities, who will want to investigate if it gives Nestlé too large a share of the market.

According to Nestlé Chief Executive Officer, Peter Brabeck-Letmathé: "This is a very important step for the Nestlé Group in its strategic trans­formation process to a nutrition, health and wellness company as it strengthens the core of our globally managed Nestlé Nutrition business."

I've written in the past about how Mr. Brabeck is trying to change Nestlé's image from junk food and confectionary company to something more wholesome. Financial analysts say Nestlé profits and share price is vulnerable if there is regulation to counter the global epidemic of obesity, part of the reason why Nestlé pushes for voluntary agreements rather than regulation. And the reason why Mr. Brabeck is trying to rebrand Nestlé as a nutrition, health and wellness company.

Well, it would be good to see Nestlé more concerned about nutrition, health and wellness, but in its business plan this means ever more technical and processed approaches to nutrition, with functional foods oversold with claims about their health benefits. We see it with the baby foods - such as the formula labels in the Philippines highlighted in our current campaign where Nestlé boasts they contain 'Brain Building Blocks'.

A transnational such as Nestlé has strategic business plans stretching for decades. Its marketing of breastmilk substitutes can take that long to undermine breastfeeding cultures (take a look at the case studies on 7 countries produced by IBFAN which record the history of the growth of artificial feeding, in most cases with Nestlé being a leading driver of cultural change).

And so its approach is not for greater understanding of nutrition for improved diets, but for improved sales. What we may need to do for better health is eat more fruit and vegetables, grown locally without chemicals. But that information would not serve Nestlé's purposes. So it tries to lead the policy direction. Three years ago it initiated an annual symposium on food and health at the Nestlé Research Centre. And last month it announced funding for a Swiss Institute on the relationship between nutrition and the brain. It will fund two chairs at the Institute. This is the company that promotes its 'brain building block' formula with claims that the Cochrane Library finds are not substantiated by research (see past blogs).

The partnership with the Institute will be for research that will: "extend from studying the role nutrition plays in children's brain development to identifying ways of slowing down brain decline in older age and preventing diseases such as Alzheimer's."

Nestlé is already claiming "a good diet has more potential than previously recognised to improve brain function." Expect more products with 'brain building blocks'. And if previous research doesn't recognise any benefit, as with the addition of Long Chain Polyunsaturated fatty acids to formula, perhaps Nestlé will be able to come up with some new research that does find benefits, perhaps endorsed by the Institute and chairs it is funding.

Nestlé would of course claim that it is only concerned with the science, not the marketing claims it may or may not legitimise. The unfortunate thing is that when the science is troublesome for Nestlé it decides it must be wrong. We see this in the news today with Nestlé rubbishing findings by the US Food and Drug Administration (the FDA). The FDA found samples of Nestlé Good Start infant formula in the US did not meet composition requirements. Specifically the FDA wrote to Nestlé on 27 November saying the formula did not meet the requirements for minimum levels of calcium and phosphorous. Calcium is, of course, the 'bone builder' ingredient, Nestlé likes to flag up on labels such as those in the Philippines. But not so much bone building will be going on if the calcium levels are below the minimum requirement.

This is devastating news for Nestlé. Its response? To say the FDA is wrong and its own analysis found no problems. See,,13129-2505991,00.html

An all too familiar story. Last year the Chinese authorities found too high levels of iodine in Nestlé baby milks and called for them to be withdrawn. Nestlé at first refused. Also last year Italian authorities seized formula contaminated with a chemical from the ink from the labels of tetrapak packaging. Mr. Brabeck claimed Nestlé had been given permission to continue selling the formula. The Italian health ministry was reportedly 'dismayed' by Mr. Brabeck's 'completely false' statement. Threatened with being sued, Mr. Brabeck put his claim down to a 'memory lapse'. See

So when science that does not suit its purposes is disputed, what confidence can we have in science funded by Nestlé and endorsed by people it pays? How seriously can we take its attempt to rebrand itself as a 'nutrition, health and wellness' company? Questions to ponder.

The point I was intending to make in this entry was that Gerber was not included in this sale. As The Times states: "some observers had expected that Gerber would be included in the same deal." It was not. Neither side is prepared to comment on whether discussions are on-going.

Given that Gerber has given an undertaking to bring its marketing into line with World Health Assembly marketing requirements (though there are still no signs of changes), we hope it remains outside Nestlé's hands or the chance that it will genuinely change will surely be lost.

1 comment:

Mike Brady said...

It was announced on 12 April 2007 that Nestlé had bought Gerber.

See my my blog entry