Monday, March 28, 2011

Brew too hot for Nestle?

"Brew too hot for Nestle?"
by Willie S. Baun
Originally published in People's Journal, STREETLIGHT, 26 March 2011
(Also available online here)

"SOMETHING’S been percolating at Nestle Phils., Inc. but the aroma it exudes is unlikely to be as enticing as its world-famous brew. The Swiss company, largest food and beverage on the planet, faces a gamut of charges here, ranging from alleged unjust contract termination, predatory pricing, perjury and deception, to false and fraudulent testimonies.

The complainants are the Sy family-owned Banco de Oro and two of Nestle’s long-time distributors –- Service Edge distribution, Inc. and FDI Forefront II Trading Corp. -– both recognized and awarded as Nestle ace marketing arms.

Pending are charges of false and deceptive testimony filed by BDO against the Swiss multinational. The bank claimed NPI fed it with “fraudulent information” in 2009 on the financial condition of Inter-brand Logistic and Distribution, Inc.

On the basis of the NPI info, BDO trustingly extended 19 loans aside brom renewing the Interbrand credit facility for a total of P19 million exposure, all of it now in jeopardy because the company has closed shop.

In yet another case, distributors Service Edge and FDI Forefront haled Nestle to court principally for alleged predatory pricing or selling its products at prices way below actual cost. Under duress, they reportedly have had to adopt the illicit practice or face immediate contract termination.

False statements purportedly submitted in court by top NPI executives have incurred perjury charges against Chairman-CEO John Martin who is not as lucky chief financial officer Peter Nozsek who managed to slip out of the country and is now reportedly in the United States.

According to these two complainants, aside from the occasions of misconduct cited, Nestle has not been as transparent and candid in dealings related to the cases filed against it.

Nestle was also allegedly deliberately untruthful when it told media that the predatory pricing suit filed by Service Edge and FDI Forefront had been dismissed by the Department of Trade and Industry for lack of merit.

The truth, they said, is DTI declared it had no jurisdiction over the complaint “due to lack of jurisprudence and the absent of pertinent laws on predatory pricing and unfair trade practies.

The legal tussle is being watched with keen interest by the business community in light of the massive Public-Private Partnership socio-economic program launched by the Aquino administration. Who else but the giant multinationals, like Nestle, would indeed most likely to be in the PPP – given the billions in investments the program envisions?

Needless to say, the Aquino government is expected to even now be legally on red alert for oppressive practice some multinationals would perpetrate or perpetuate to shortchange their local partners.

Streetlights kibitzer Jose is saying that NPI has just celebrated it 100th year of operations in the Philippines. He winks as he handed me a statement of the NPI about how its business conduct has been “consistent with universally accepted practices adhering to fairness, transparency, and compliance with all applicable laws.”

I do not wish to believe that for so long a time now, some multinationals hosted by the Philippines have been pulling the wool over the eyes of their Filipino partners and the government."


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