Malaya responds to Nestle

"That Swiss company" by Ducky Paredes, MALAYA, 13 April 2011

(Original article available online here)

"WARREN Buffett – quite simply – is the greatest investor who has ever lived. He is the primary shareholder, chairman and CEO of Berkshire Hathaway, and the skill with which he has managed billion-dollar funds is the stuff of legend. As of 2011, Buffett’s net worth was estimated at more than US$50 billion – the third richest man in the world.

What drives Buffet who lives in an ordinary house, just like any of his neighbors? For several years now, he has been trying to give away his fortune to philanthropic causes. He travels all over the world, encouraging other billionaires to do the same. Buffett knows that "you can’t take it with you."

Now why exactly am I writing about Warren Buffett? For over a year now, I have written several items calling the public’s attention to the bullying behavior of Nestlé Philippines, Inc. (NPI). Specifically, the way it treats local distributors – in other words, Filipino small and medium enterprise owners – is nothing short of shameful.

A number of these distributors have sought the intervention of the Department of Trade and Industry (DTI), only to be inexplicably told that this is not within their jurisdiction. These ill-treated entrepreneurs have since found an ally in antitrust crusader and noted lawyer Lorna Kapunan, who has brought the matter to the attention of the Senate.

In looking for where to invest, Warren Buffett advises: "Don’t just invest in a company and its ability to turn in a profit. Find out how the company behaves, and the integrity of the people running it. Would you trust them with the keys to your house? The best ship in the world will get lost at sea, or even sink, if the captain and his crew are questionable".

Tomorrow, April 14 is the 44th Annual General Meeting for Nestlé shareholders in Lausanne, Switzerland. I wonder how many of these shareholders subscribe to Warren Buffett’s way of thinking, and are willing to apply it to Nestlé? Is the mother company aware of what’s happening here in the Philippines?

Probably. For instance, last October, the Children’s Food Campaign (CFC) in Britain blasted Nestle for misusing the British government’s Change4Life (C4L) anti-obesity campaign. The whole idea behind C4L was for people to cut down on fattening food, be more active and live longer.

Nestle used the CFC logo in its marketing campaign but Sustain, the alliance behind CFC, soon found out that 24 out of the 27 products included in the Nestle promotion were categorized as high in sugar by the British Food Standards Agency guidelines. CFC finally decided that no company that promotes unhealthy and junk food should be allowed to associate with a government health campaign.

Locally, while the Nestle ad on TV and print featuring Kris Aquino and her son uses the tagline "more milk, less sugar" probably referring to a miniscule difference in sugar content compared to a competing product’s sugar content, isn’t Nestle, in reality, a major sugar pusher with its ice cream, chocolates, iced tea and practically everything that Nestle produces? Is there anything that Nestle produces that is not heavy with sugar?

Clearly, Nestle is not run by anyone close to being a Warren Buffet who cares about what his company represents.

Imagine that one of the highest-ranking officials of the Nestle Company is Nandu Nandkishore, who used to be the Chief Executive Officer of NPI until he got promoted to Nestlé’s Executive Board as Head of Nutrition. That’s a giant leap for someone who actually faces charges of perjury in Makati and Quezon City courts. How many global companies have a person facing criminal charges on their Executive Board?

In the Australian Senate, Senator Gavin Marshall of the Labor Party last March 2, 2011 talked about the unresolved case of the Nestle factory workers in Cabuyao, Laguna. The senator said that these workers have been on strike for over ten years and that over 500 workers have been dismissed for simply trying to exercise their right to have retirement benefits included in their collective bargaining agreement (CBC).

According to Senator Marshall, Nestle has also defied a decision by the Supreme Court to allow a decent retirement plan to be included in the CBA for the factory workers and that Nestle also refuses to reinstate the striking workers and negotiated in good faith on the CBA.

Finally, if you talk about integrity, how can Nestlé in Switzerland tolerate the predatory pricing and vertical price restraint operations of Nestlé Philippines, when these are patently against the laws set forth even in Switzerland itself by the Swiss Competition Council?

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