Cause for concern

Little did two university undergraduates know that when they approached Nestlé to place an ad for a chocolate bar in their alternative student newspaper, it would be the start of what has turned into the longest investigation undertaken by the

Little did two university undergraduates know that when they approached Nestlé to place an ad for a chocolate bar in their alternative student newspaper, it would be the start of what has turned into the longest investigation undertaken by the Advertising Standards Authority.

The ad that was placed in the Oxford Independent at the end of 1996 was not for a Kit Kat, but a rebuttal by Nestlé of accusations made about its marketing of infant formula in developing countries.

More than two years later, the ASA provisionally upheld complaints about the ad from Baby Milk Action, a pressure group which aims to halt the commercial promotion of bottle feeding and promotes appropriate infant nutrition such as breast-feeding (MW February 4).

But a last-minute appeal from Nestlé caused the embarrassing ruling to be pulled from the February issue of the ASA’s monthly report.

This is just one in a series of battles that the international food company has had to fight since the first boycott of its products was launched in the US in 1977 by Infant Formula Action Coalition to protest against Nestlé’s role in promoting artificial infant feeding around the world.

Nestlé is not alone in having to deal with controversy over its business practices. Oil giant Shell came under fire from environmentalists over the proposed dumping of the oil platform Brent Spar at sea and the effects of its projects in Nigeria. Fast-food company McDonald’s had to contend with the media spotlight after bringing a libel action against two individuals who had made allegations about the fast-food chain in campaign leaflets.

Clothing and sporting goods manufacturers have also had to wake up to the fact that consumers have become more concerned about working conditions inflicted by suppliers on their labour force.

Hamish Pringle, former vice-chairman of Saatchi & Saatchi, who has set up his own cause-related brand and marketing consultancy called Brand Beliefs, says: “The problem that all these companies are facing is that information about their activities is becoming ever more widely available. If you go back ten to 20 years it was hard to see what the companies were doing. Now the media has made them much more transparent.”

When the boycott of Nestl̩ first began, the protesters had one aim Рto stop the company promoting breast milk substitutes to parents and health workers through advertising and the distribution of free samples.

Despite the World Health Assembly (WHA) adopting an International Code of Marketing of Breast-milk Substitutes in 1981 which dealt with this, it was not until 1984 that Nestlé agreed to comply with the code in Third World countries. The boycott was suspended, but later resumed in 1988 as a result of concern at the International Baby Food Action Network (IBFAN) over Nestlé’s compliance with the code and subsequent resolutions of the WHA.

The controversial anti-boycott ad was placed in 1996 in a free newspaper set up by two students at Oxford Brookes University.

Baby Milk Action, a pressure group belonging to IBFAN which monitors compliance with the code, complained to the ASA. It claims that according to the World Health Organisation, up to 1.5 million babies could be saved each year if the decline in breast feeding was reversed.

The ad said that “even before the WHO International Code of Marketing Breast-milk Substitutes was introduced in 1981, Nestlé marketed infant formula ethically and responsibly, and has done so ever since”.

The ASA provisionally ruled that Nestlé could not support this claim and that it “went too far”.

Another claim in the ad, that “naturally they [Nestlé employees] do not provide free supplies to hospitals for use with healthy infants”, was also ruled unacceptable.

The ASA ruled that the claim implied such practices had ended “a very long time” ago. In fact, the company admitted giving free supplies to South Africa until October 1992; Thailand until July 1988; Bangladesh until January 1993; and to hospitals in China as recently as April 1994.

The ASA also ruled against the claim that: “The Nestlé Charter concerns Nestlé’s commitment to the WHO International Code in developing countries” on the basis it suggested there had been compliance with the code “over time to a degree that had not been substantiated”.

Nestlé was warned by the ASA not to repeat the three claims.

So why did Nestlé place an anti-boycott ad in a free newspaper in 1996? Cash-strapped students Oliver Cohen and Robert McGinn claim they approached the company because of the boycott, knowing that other student newspapers, run by the National Union of Students, would not take confectionery ads from the company.

Cohen says: “We had approached the corporate communications office of Nestlé and were hoping for a nice little Kit Kat ad. But maybe Nestlé did it as a tester to see what the market was like and to see how students reacted.”

Nestlé, however, says it was asked to put its case to stimulate a readers’ debate, and used the style of an advertorial as a statement of its beliefs. There had been much support for the Nestlé boycott in Oxford.

Two years earlier the Oxford Diocese had passed a resolution calling on the Church of England to disinvest in Nestlé following the General Synod’s vote in 1991 endorsing a boycott of Nescafé coffee.

Mike Brady, campaigns and network co-ordinator for Baby Milk Action, says: “This demonstrated the level of support for the boycott in Oxford.” He believes that Nestlé targeted Oxford in 1996 with the “anti-boycott” ad to test public opinion because the issue of the boycott was to come before the Synod again in 1997.

That year the Synod, which had suspended the boycott in 1994, affirmed the conclusions of a report called Cracking The Code, produced by the Interagency Group on Breast-Feeding, which concluded that major manufacturers of breast-milk substitutes continued to contravene the code.

Nestlé has refused to comment on why or who placed the ad in the Oxford Independent.

Although the ad appeared nearly three years ago, the issue of Nestlé’s marketing of infant formula does not look like disappearing. The Liberal Democrat Youth & Students group is putting forward a motion at the Liberal Democrats’ Edinburgh conference in March on the marketing of breast milk substitutes which is expected to include a clause in support of the Nestlé boycott.

So how should Nestlé deal with this © issue that has dogged the company for more than 20 years?

Marjorie Thompson, a director of Cause Connection, Saatchi & Saatchi’s cause-related marketing arm, says: “Nestlé should ignore it, deal with it through the courts, or negotiate with pressure groups.”

She suggests the way to counteract the bad publicity is to go on the offensive by using advertising showing the benefits of Nestlé’s financial contributions to charities, such as Kids Club Network which provides after-school care for children.

She adds: “It’s not just about marketing the brand, but marketing what the brand believes in.”

Pringle says: “To lay the ghost of baby milk aside, Nestlé should embark on a cause-related and ethical programme and embrace the activists’ suggestions on business practice.”

Both Pringle and Thompson point to Shell, which was forced to do just that after Greenpeace activists occupied Brent Spar. The company consulted environmentalists and campaigners before coming to a final solution which involved using part of the steel platform as a foundation for a harbour in Norway and breaking up the rest on dry land for recycling.

A spokeswoman for Shell admits: “Since then, we’ve realised that we have to cultivate these sorts of discussions more widely and listen to opinions.”

Another company which could have used good works in an advertising campaign to counter bad publicity is McDonald’s, claims Pringle. He says: “If more people had known about Ronald McDonald House Charities for under-privileged children, I doubt the company would be suffering as much from McLibel now.”

Pringle, who has written a book with Thompson on cause-related marketing, called Brand Spirit, thinks the market is in the “third wave of branding”, having been through the promotion of practical product-related benefits in the Sixties and the emotional aspects of brands in the Eighties.

He says: “Consumers want a brand that works, that gives them thoughts and feelings, but they also want to know what it believes in.”

Labour conditions are fast becoming one issue of concern for consumers. A MORI opinion poll commissioned by CAFOD on ethical shopping in 1997 revealed that 92 per cent thought companies should have a minimum agreed standard of labour conditions for their workers in Third World countries.

Christian Aid has produced a number of reports on this issue focusing on sports goods and the food chain. “A Sporting Chance,” published in May 1997, revealed adult stitchers in India received as little as 14p for making a Mitre football which sold in the UK for 14.99. At the time Christian Aid called on India to follow Pakistan in the phased eradication of child labour and to look at US codes of conduct in the clothing industry.

The charity is also on the verge of updating its “Change at the Check Out?” report of October 1997 which looks at the track record of supermarkets in the area of ethical responsibility.

Roger Williamson, director of policy and campaigns at Christian Aid, says: “We deliberately take the approach of not boycotting products. What we want is an improvement of standards across the board.”

The charity and others such as Oxfam and the Fair Trade Foundation are active members of a new Government-backed scheme called the Ethical Trading Initiative. The programme brings together food retailers and producers, non-governmental organisations such as trade unions and government departments in drawing up standard codes on trading practices and a means of independently auditing them.

One member, the Co-operative Wholesale Society, carried out its own research into ethical shopping in 1995 which revealed that three in five consumers were willing to pay more for goods that met ethical standards. The Co-operative Bank has already adopted a policy of not investing in certain types of business after consulting customers. This has been incorporated into its marketing and advertising campaigns.

The benefits of cause-related marketing are long term, claims Thompson, who adds: “You are building a surplus account for the times when you have a crisis.”

Marketers are also beginning to realise that as rival brands become closer on price and quality cause-related strategies offer a point of difference. A survey by the charity Business in the Community published in November last year revealed 58 per cent of marketing directors agree that cause-related marketing provides companies with an opportunity to address business objectives and social issues at the same time.

The more powerful a business gets, the more likely it will come under scrutiny from consumers. Adopting a cause-related marketing could counter-balance the bad publicity emanating from a subsequent business crisis.

Critics will continue to find those companies which have not invested in such a strategy, or, like Nestlé, have not actively promoted their good works, an easy target.

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