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Nestle: Now .01% Responsible

Nestle first became the target of activists over 25 years ago for aggressively marketing baby foods and formula in less developed countries. A massive boycott followed which has, over the years, made Nestle synonymous with corporate greed and lack of compassion particularly related to less developed countries. Nestle is attempting to repair this reputation by attaching a well-respected label to their company: Fair Trade.

Nestle’s website claims that, “The problem with the world coffee market is that sometimes there are simply too many beans”. However, an Oxfam report claims that companies such as Nestle continually manipulate the market to ensure that small farmers in developing countries remain in poverty. “As it is, with farmers getting a price that is below the costs of production, the companies' booming business is being paid for by some of the poorest people in the world.”

Profile

Nestle began in Switzerland in 1866 as a baby food and condensed milk company. Today, Nestle is the world’s largest food conglomerate. With sales of over 67 billion in 2004, the now international company is comfortably controlling the world’s food and beverage business. Nestle has factories or operations is almost every country in the world.

Along with Sara Lee, Kraft, and Procter & Gamble, Nestle buys nearly half of the world's coffee beans every year. Of these companies, Nestle has the highest profit margin, 26 cents on the dollar for instant coffee, which is the majority of Nestle's coffee sales.

Of course, Nestle's reach goes way beyond coffee and baby food. The company owns over 1000 brands, from Kit Kat to ALPO dog food to PowerBar. For a complete list of Nestle brands, click here.

Rhetoric

Among its range of 8,500 products, Nestle has one that bears the Fair Trade mark: Partner’s Blend Coffee. On the company’s website launched to promote the venture, it claims, “Nestlé's long-term commitment is to develop sustainable agricultural practices, and we have been involved in a number of initiatives for many years. NESCAFÉ Partners' Blend, our first Fairtrade certified coffee, is our latest initiative to help solve this longstanding problem.”

Nestle claims that low prices for coffee is a simple result of coffee supply outpacing demand, and that “sometimes, there are just too many beans”, and farmers may not make a profit. At the same time, Nestle recognizes that getting into the fair trade market would probably be a profitable venture for them.

Fiona Kendrick, Nestle’s UK head of beverages, said "Fair Trade is quite clearly growing enormously in terms of its awareness. Specifically in terms of coffee, fair trade is 3% of the instant market and has been growing at good double-digit growth and continues to grow."

Nestle claims it already gets 14% of its total coffee needs directly from growers, and that it chose to buy its fair trade beans from El Salvador and Ethiopia because they were two countries where farmers were "suffering". The company says that while its decision has been driven by the consumer, it is committed to providing coffee growers with a fairer price for their product. "This represents a fundamental, serious commitment to help some of the poorest farmers in the world".

Reality

Nestle's move threatens to water down the meaning of one of the most important social consumer movements: Fair Trade. The reality of Nestle is that 99.9 percent of their coffee is still not fairly traded, but launching this one product has allowed it to be affiliated with the Fairtrade movement.

The World Development Movement, a campaigning group which tackles the causes of poverty, said: "The launch of a Nestle Fairtrade coffee is more likely to be an attempt to cash in a growing market... than represent the beginning of a fundamental shift in Nestle's business model." It called on Nestle to "alter its business practices, lobbying strategies, and radically overhaul its business to ensure that all coffee farmers get a fair return for their efforts".

This is not only a sham to distract from the continually negative flow of PR coming Nestle’s way, it is also in direct opposition to Nestle’s standard practices. If they actually do, aim to help the poorest farmers in the world by paying a higher price for their coffee, they have every opportunity to use their power to do so. Instead Nestle, along with other big coffee buyes, have played the market to boost profits while driving the farmers further into poverty.

Nestle controls a huge share of the worldwide coffee market. By choosing to make even five percent of their coffee fair trade certified, they could seriously impact the industry and help to raise prices for all coffee farmers. Instead, they have chosen a token move forward while continuing their efforts to keep coffee prices low at all costs.

Recommendation

Most activists would agree that Nestle has a long way to go to lose the title of most boycotted company. However, to lose its title of fair trade greenwasher, it would need to extend the fair trade certification to a much larger percentage of its coffee. Even raising the amount to attain the five percent that many social justice groups ask for would be a step in the right direction and allow Nestle the right to use the fair trade symbol.

Until this happens, this is another reason in a series of reasons to stay away from Nestle. Until the company commits to real change that will actually benefit farmers in less developed countries, consumers are reccommended to choose products that are not owned by Nestle. Check out this website for a list of brands to avoid.

When shopping for coffee, check out brands such as Equal Exchange, who not only source 100% of their coffee from fair trade and organic farmers, but also buy from cooperative farms rather than plantations, which is overall vastly more socially and environmentally responsible.

Action

Join the boycott against Nestle, and check out babymilkaction.org for boycott updates. Also, join the cause by sending a letter to Nestle’s CEO Peter Brabeck-Letmathe by clicking here.

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