Nestle's New Deal More Proof of Profits Trumping Public Health

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Common Dreams

Nestle's New Deal More Proof of Profits Trumping Public Health

Company purchased Pfizer's infant formula business, creates privatization pathway in emerging Asian markets

by
Common Dreams staff

A deal that saw pharmaceutical giant Pfizer sell its infant formula business to Nestlé in a $11.85 billion billion deal this week is another attempt by Nestle to put profit over public health, said a watchgroup group on Monday.

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Wenonah Hauter, Executive Director of Food & Water Watch, stated that Nestle's "renewed focus on growing the market for its infant formula products is troubling given the corporation’s track record of using dubious practices to market infant formula in developing countries, where it is often prepared in unhygienic conditions with unsafe water. It appears this investment will pave the way for more dubious marketing practices, which as recently as last year have been criticized by public health groups in Laos."

Hauter notes that the move also conveniently allows the company to make a profit on its bottled water sector at the same time.

“Nestlé has another product it’s pushing on consumers in developing countries: bottled water. As Nestlé’s bottled water business stagnates in industrialized countries, it’s turning to the emerging markets to sustain it. Both bottled water and infant formula are two products that the company has defined as ‘Popularly Positioned Products’* that target ‘less affluent consumers in emerging markets’. Surely, it is no coincidence that many mothers will prepare the formula with bottled water—which will no doubt benefit Nestlé’s emerging market strategy."

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Irish Times: Pfizer sells infant formula concern to Nestlé for $11.8bn

Pfizer, the US pharmaceutical giant which employs about 4,000 people in Ireland, has sold its infant formula business to Nestlé in a deal worth $11.85 billion (€9 billion). [...]

Nestlé, the world’s largest food company, staved off competition from Danone to purchase Pfizer Nutritionals at a price at the upper end of expectations. [...]

While Nestlé is the world’s biggest infant formula producer, it has been losing market share in the lucrative Chinese market. About 85 per cent of Pfizer’s infant formula sales come from emerging markets such as Asia, Africa and the Middle East.

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Food & Water Watch: Nestlé’s Purchase of Pfizer’s Infant Formula Unit Reinforces Its Emerging Markets Strategy to the Detriment of Public Health

WASHINGTON - April 23 - “Today Nestlé announced it has purchased Pfizer’s infant nutrition unit to expand into fast-growing emerging markets, particularly in Asia. This renewed focus on growing the market for its infant formula products is troubling given the corporation’s track record of using dubious practices to market infant formula in developing countries, where it is often prepared in unhygienic conditions with unsafe water. It appears this investment will pave the way for more dubious marketing practices, which as recently as last year have been criticized by public health groups in Laos.

“Nestlé has another product it’s pushing on consumers in developing countries: bottled water. As Nestlé’s bottled water business stagnates in industrialized countries, it’s turning to the emerging markets to sustain it. Both bottled water and infant formula are two products that the company has defined as ‘Popularly Positioned Products’* that target ‘less affluent consumers in emerging markets’. Surely, it is no coincidence that many mothers will prepare the formula with bottled water—which will no doubt benefit Nestlé’s emerging market strategy.

“Selling bottled water to poor people, and pushing infant formula on poor but otherwise healthy mothers who may not have access to safe drinking water is doing what Nestlé does best: undermining public health in the name of profit.”

* This report was obtained at the link http://www.research.nestle.com/asset-libraries/Documents/Popularly Positioned Products.pdf on April 9, 2012. It has since been removed from its public site and is now only accessible there via log-in.

Additional resources: “Why Are Hospitals Involved in Marketing Infant Formula?

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