Tuesday, April 12, 2011

Nestle cheers and jeers

"Cheers and Jeers", People's Journal, 11 April 2011
(Original article available online here).

"Nestle Philippines, Inc. (NPI) must still be in a celebratory mood, having recently marked a century of existence among Filipinos, a great number of whom have patronized its products for much of their lifetime.

In recent weeks, and probably to highlight this very special milestone in its corporate life, NPI has engaged itself in a frenzy of corporate social responsibility projects and business related undertakings. These included mobilizing 525 of its people to conduct what it claims to be the largest carpentry lesson ever to be held anywhere in the world, one that would outshine the existing Guinness World Record of 250 people in a similar exercise.

The company even commissioned nine directors to produce short films that would “celebrate” its 100 years of operation in the Philippines.

But possibly its more significant exercise in this regard is its commitment to work with the Department of Agriculture, the Land Bank of the Philippines and Banco de Oro, to infuse more pep in the country’s coffee industry. This is supposed to pour some P3 billion into the venture, a major portion of which will reportedly be used to provide loans to coffee farmers in the country.

For this, we say “Cheers!” Let’s drink to that, and not with any alcoholic concoction, but with Nescafe, perhaps?

There’s something ironic in all these, however, because for some time now, NPI appears to have assumed the role of an oppressor, a kontrabida, as one is called in the local cinematic milieu. And that’s because the company has allegedly been enforcing its version of predatory pricing upon its Filipino distributors, which constitute anti-trust and unfair trade practice.

NPI stands accused of compelling its distributors, under pain of cancelation of distributorship contracts, to abide by its inflexible prices. It is said however, that these prices do not consider the distributors’ cost of delivering Nestle products to wholesaler and other retail outlets; the interest charges for financing the purchase of these products, and the municipal taxes that its distributors have to shoulder. This resulted in bankruptcy for one of them, and huge losses for another.

Two distributors of NPI have filed charges to this effect with government regulatory agencies. The distributors have also filed criminal complaints of perjury against top officials of Nestle. We are informed that two of these officials, former Chairman and CEO Doreswamy Nandkishore and former Chief Finance Officer Peter Noszek, have quietly slipped out of the country and are now effectively out of reach of our judicial system. The former is reportedly with the Nestle head office in Switzerland while the latter is said to have been reassigned to the US.

Incidentally, its partner in the coffee venture, Banco de Oro, has also taken NPI to court for having “knowingly made a false representation with intent to mislead the bank” into renewing the loans of one of its distributors. The false information given by NPI led to millions of losses for the bank.

What then, do we say to all these but ...”Jeers!”

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