Monday, September 28, 2009

Nestlé's threats to farmers in Zimbabwe

You really could not make it up! Unbelievable!

I wrote yesterday about reports of Nestlé buying milk from Grace Mugabe, wife of President Mugabe of Zimbabwe. The Mugabe's are on a list of government people facing sanctions over human rights abuses in Zimbabwe.

In the report on the BBC website Nestlé defends buying the milk, stating:

"Had Nestle decided to close down its operations in Zimbabwe, the company would have triggered further food shortages and hundreds of job losses among its employees and milk suppliers in an already very difficult situation."

Nestlé reportedly buys just 10 - 15% of its milk from the farms Grace Mugabe has seized from other farmers. So it would not really have to pull out if it respects the sanctions.

The threat sounds strangely familiar. In 1998 Zimbabwe was introducing legislation controlling the marketing of baby foods. Nestlé called a meeting of Parliamentarians and told them that if the law went ahead it would pull out of Zimbabwe. Nestlé said: "This would result in job losses for about 200 people and an extremely negative economic impact on local farmers who supply us with milk, wheat, maize and sugar."

The Minister of Health judged that Nestlé was making an 'idle threat' as Nestlé would not pull out of the country - it wasn't there to create jobs, but to make money. Zimbabwe went ahead with legislation to protect its babies. Nestlé did not pull out of Zimbabwe. Nesté's threat was picked up by Mark Thomas in one of his investigations into Nestlé. See:

Later Mark interviewed the Minister of Health, Dr. Stamps, who was very critical of Nestlé's behaviour. See:

So when it suits Nestlé to threaten people with hardship it has no qualms. When it suits it to express sympathy for their plight, then it will do so to defend sanction busting! The common factor? Nestlé profit.

Nice one, Nestlé!

We know you.

It is Nestlé's management style that employees should fear as well when it comes to their job security and keeping their hard-won benefits - not the boycott. With Nestlé rumoured to be interested in a hostile takeover of Cadbury's, people would do well to learn from what happened to Rowntrees. See:

UPDATE 30 September: According the reports citing the Swiss Government on possible sanction busting, no action is being taken as: "Nestlé confirmed that no individuals or companies in Switzerland were in any way involved in the relevant transactions."

My response: "So Nestlé Switzerland claims it has no control over Nestlé Zimbabwe all of a sudden? This is simply absurd and should have any attentive shareholder seriously worried. On the other hand, when people raise concerns over its baby milk marketing Nestlé is happy to claim that it ensures subsidiary companies respect the baby food marketing requirements (despite the company as a whole systematically breaching the requirements). Nestlé claims control when it suits it and denies control to try to escape a charge of sanctions busting."

UPDATE 2 October: Nestlé has said it will stop buying milk from Grace Mugabe's farms. According to The Guardian: "The company claimed it had been buying the milk since February because the cash-strapped Dairy Board of Zimbabwe could not. It said it did not want the milk to go to waste and hoped to boost the country's deteriorating food supply."

That's a rather different line from suggesting that if it didn't buy the milk it would have to pull out of Zimbabwe, and just shows how Nestlé will say anything it thinks will avoid bad publicity.


curetheplanet said...

that is the Nestle way!!!

Anonymous said...

I am not a believer in big equalling bad, but Nestle are just big bad bullies.