NESTLE & THE INFANT FORMULA CONTROVERSY

Nestle & the Infant Formula Controversy

Did Nestle Incur an Ethical Violation through the Marketing of Infant Formula?
Heber Longhurst, CFA
International School of Management

NESTLE & THE INFANT FORMULA CONTROVERSY

Abstract
Depending on the philosophical lens through which we obverse the events, Nestle either incurred
serious ethical lapses in the advertising and marketing of their infant formula or was actually
making a net positive contribution. Nestles infant formula was marketed throughout developing
countries where Nestles advertising can create profound cultural shifts among consumers. From a
pure business perspective Nestle did not incur any ethical lapses, from a deontological perspective
the conclusion is mixed, from a consequentialist/utilitarian perspective the net result is positive,
but better advertising would have accomplished a better utilization of the product and could have
saved more lives. Virtue ethics dont shed much light on the ethical debate regarding Nestles baby
formula.
Keywords: Nestle, marketing, advertising, deontology, consequentialism, utilitarianism,
virtue ethics, WHO, ethical codes.

NESTLE & THE INFANT FORMULA CONTROVERSY

CASE BACKGROUND
In the case study of Nestle and the Infant Formula Controversy, the company was boycotted for
over 20 years, for allegedly being involved in the death of infants in impoverished countries. The
details of the case are interesting, as at first glance it appears that the deaths were caused, not so
much by the use of Nestles infant formula but rather by the misuse of the formula.
In the amazon tribes in the juggles of Peru the infants who died were due to formula being mixed
with water from a highly contaminated river, in other cases the parents were diluting the formula
to stretch their supply or thinking that the bottle itself had nutrient qualities and that by filling it
with water they were providing their infant with nutrients. In other cases, parents were replacing
breast feeding and using the formula exclusively instead of using it as a supplement to breast
feeding (p. 598).
In these cases it appears that the infants death is not due to use of the formula but rather mis-use
of the formula on the part of parents. However, I dont think we can jump to the conclusion that it
is therefore the parents fault as no parent would willingly put their childs life at risk.
Nestls defense was that they had never advocated bottle feeding as a replacement for breast
feeding, that their solution can be a healthy supplement to natural breast milk especially when
mothers diets are deficient, that due to busy work scheduled some mothers chose to feed their
babies with the bottle rather than breast milk, that some of the native weaning foods are can be
inadequate or contaminated and that the real solution would be to improve the level of education
and sanitation in developing nations (p. 598).
So what is Nestles responsibility in a developing world environment where their advertising is
likely to create cultural shifts? What are the ethical responsibilities involved in marketing to lesseducated and somewhat vulnerable customers?
VIRTUE ETHICS
There are several ways that we can look at ethics. In fact the great questions of what is right and
wrong as how we can live correctly were among the first questions asked by the earliest
philosophers. In early moral philosophy, virtue ethics applied a much broader definition to the
terms virtue and vice than we use today (Hutchings & Adler, 1952, p. 975). In modern times, both
virtue and vice usually are given a narrow sexual context, whereas in ancient times the first
philosophers used these terms to regulate the whole of ethics and moral philosophy (p. 975).
The pre-Socratic philosopher, Heraclitus, believed that wisdom and self-control were among the
highest virtues as according to this ancient mystical philosopher these are the virtues that helped
nurture what he described as a fire within the human soul. In Platos Republic the key virtues that
are mentioned include: courage, justice, temperance and wisdom (p. 357). Among, Platos
dialogues which discuss virtue at length include, Meno, Protagoras and Euthyphro. Another
twist on virtue ethics, began with Aristotles Ethics which later, to avoid confusion with all the
other books named ethics has been renamed Nicomachean Ethics. In this book, Aristotle describes

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ethics and morality less as moral imperatives or codes and more as a man discovering a living his
teleology (p. 339). In this sense, one of the keys to virtue ethics in Aristotles thinking wasnt so
much to place limits on human behavior rather to create guidelines whereby man can live a good
life, which is described not only as living a happy and productive live, but also as making a positive
contribution on society. Furthermore, Aristotles understanding of the life lives well, expands
beyond the grave, in the sense that there are cases in which you cannot fully ascertain whether a
life was lived well until several years, generations or centuries after the death of that individual.
Aristotle expands the idea of what makes a person good or bad from merely thinking about their
actions, to also examining their character and intellect. In other words, includes desires and
emotions as well as actions in determining if one truly virtuous (Hutchins & Adler, 1952, p. 975).
Aristotle also contends that there are three things which make men good and virtuous: these are
nature, habit, rational principal (Aristotles Nicomachean Ethics, quoted in Hutchings & Adler,
1952, vol. 3, p. 978). Aristotles focus on nature which was equated with station of birth has
been criticized (in my opinion correctly) for being too elitist.
Aristotle builds on Platos ideas of fundamental or cardinal virtues but divides them into moral
virtues and intellectual virtues. The moral virtues of courage, justice and temperance which Plato
put forth are also included in Aristotles virtue ethics. Prudence is included as the intellectual
virtue most closely aligned with the moral virtues, as prudence is in his writings a practical wisdom
(as opposed to speculative wisdom which he also enumerates as an intellectual virtue). He also
lists art, science and intuitive reason as intellectual virtues. St. Thomas Aquinas also taught
virtue ethics, but called intuitive reason, understanding (Hutchins & Adler, 1952, p. 975).
For St. Thomas Aquinas, the original moral or classical virtues of Plato and Aristotle (courage or
fortitude, justice, temperance and prudence) were called the cardinal virtues, while assigning a
lower importance to the virtues of speculative reason. Philosophers and theologians at that time
taught seven fundamental virtues which included the four cardinal virtues taught by Plato and
Aristotle and the three theological virtues (faith, hope and charity) taught by the Apostle Paul in
the New Testament (p. 976). Both Aquinas and Augustine taught that the main virtues were seven,
which included a combination of the cardinal and theological virtues (Hutchins & Adler, 1952, p.
976).
According to Aristotle, in order to fully possess a virtue one had to possess all of the basic virtues,
in other words, all virtues blended into each other (p. 978). Aquinas believed that justice was the
foundation of the other virtues and Marcus Aurelius believed that justice was prior to all other
virtues (p. 979). Sir Francis Bacon had a more nuanced view of virtue ethics and colored virtues in
relation to their vices describing vices as the defects of virtue and allowing that a person with vices
could also be virtuous. However, the idea that someone could be virtuous in some aspects of
character while also having vices was rejected by Montaigne and Kant as well as by Plato and
Aristotle (Hutchings & Adler, 1952, p. 979).
META-ETHICS

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The field of meta-ethics, beyond asking whether something is ethical or moral, the field of metaethics seeks to determine whether we can even accurately ascertain what is meant by good or
bad. Even Machiavelli when encouraging princes to do things that many would consider to be
unethical equated virtues with good and vices with evil. However, some would argue that there
are still too many ungrounded assumptions regarding in moral philosophy regarding good and
bad. Some of the questions that need to be asked about ethics include what the underlying point
of seeking virtue should be. Is virtue a seeking for pleasure and an avoidance of pain? Is virtue
good because it conforms to human nature, to nature itself or to some divine plan? Is virtue
seeking ones own happiness or seeking the happiness of others? Is virtue to be found in
submission to the will of some divine being? Are virtues desirable for their own sake? Or are
virtues only desirable when they are useful and profitable?
Locke wrote about how notwithstanding the fact that things which in one country are considered
virtues are considered vices in other countries, all countries associate the word virtue with praise
and the word vice with blame. Hobbes wrote about how that which one man deems to be wisdom
might be called fear by another man and about how prodigality or cruelty in the eyes of some
might be generosity or justice in the eyes of others (Hutchins & Adler, 1952, p. 980).
The meta-ethical questions posed by G.E. Moore in Principia Ethica and by Alasdair MacIntyre in
After Virtue, dig deeper than these prior questions in that they claim that in order to begin
studying the questions of moral philosophy we first need to define what is meant by the terms
good and bad. In other words, these philosophers claim that most of the discussions regarding
good and evil lack sufficient foundation as they usually recur to emotional criteria such as
pleasure, pain and happiness. The problem with the emotive meanings that we use to define good
and bad is that they are subjective and can change from place to place and from time to time.
However, it might not be possible to fully ground the terms good and bad in rationalist or
empirical or objective ways.
Both Kant and Hobbes, criticized Aristotles doctrine of the mean or the idea that virtue was
merely avoiding extremes. Kant wrote that it was the quality with which certain maxims were
followed that made more sense than the quantity with which one avoided the extremes. Spinoza
considered self-preservation to be a guiding factor in moral philosophy and in a way similar to
Hobbes thought that civil peace and the good of others was merely a reaction to the need for selfpreservation (Hutchins & Adler, 1952, p. 980). Spinoza also thought that to act in conformity with
virtue was to act according to the guidance of reason (Hutchins & Adler, 1952, p. 980).
UTILITARIANISM
Another way to view ethics and moral philosophy is the idea proposed by John Stuart Mill, who
stated that the multiplication of happiness is according to the utilitarian ethics, the object of
virtue (John Stuart Mills Utilitarianism quoted in Hutchins & Adler, 1952, p. 981). According to
Mill the world exists in an imperfect state and there are always trade-offs between sacrifice and
happiness, and that due to the scarcity of happiness in the world we should do all we can to
maximize happiness. He criticized the stoics and the proponents of virtue ethics who thought that

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virtue should be pursued solely for the same of pursuing virtue. Instead Mill thought that only an
increase in happiness justified sacrifice and that only measure of the goodness of a virtue was
whether it increased happiness. According to this utilitarian doctrine virtue was not necessarily an
ingredient to happiness, it could become part of happiness, but was not necessarily or inexorably
linked to happiness (Hutchins & Adler, 1952, p. 981).
DEONTOLOGY
While Mills idea that virtue and happiness were not always connected contradicted sharply with
Plato, Aristotle and the rest of the proponents of virtue ethics, it also conflicted with Immanuel
Kants ideas. According to Kant the connection between virtue and happiness came about because
the rational pursuit of happiness and the pursuit of virtue are not separate, but are actually
absolutely identical in that virtue produces happiness as something distinct from the
consciousness of virtue. In other words that virtue produces happiness as a natural cause and
effect relationship rather distinct from the pride and satisfaction which comes from living
virtuously (Hutchins & Adler, 1952, p. 982).
According to Kant, happiness comes not from the pursuit of happiness but rather through the
pursuit of being worthy of happiness or o doing ones duty. He wrote that morality is not properly
the doctrine of how we should make ourselves happy, but how we should become worthy of
happiness (Kants A Critique of Practical Reason, quoted in, Hutchins & Adler, 1952, p. 982).
Immanuel Kants Categorical Imperative is the foundation of the moral philosophy known as
deontology and was originally introduced in his 1785 book, A Groundwork for the Metaphysics of
Morals, and basically states that we should only act according to that maxim whereby we can at
the same time will that it should become a universal law. In other words, even if something were
to be convenient to an individual or increase his wealth or power in the short-term if the action
were the type of action which were to be damaging if extrapolated to all humanity and were to be
made into a universal law, than regardless of the individual or situational circumstances this action
would be categorically unethical. Deontology is, of course, very rigid and in many cases
impractical, but it does provide a broad framework on which to categorically define every action as
either ethical or unethical.
THE AMORAL BUSINESSPERSON
Many of the ethical considerations mentioned earlier apply most directly to individual ethics and
virtue. When we narrow in topic of ethics and consider ethics not at the individual level but at the
organizational level we can find that many of the considerations which individuals must take into
account are not necessarily applicable for organization, or can be applied in different ways. For
example, if the teleology of the individual is to be happy, healthy, and successful and contribute to
the good of society than the teleology of a business organization could be quite simply to earn a
profit. In fact, according to Noble laureate, Milton Friedman, the only social responsibility of a
business is to increase profits. Under this assumption, while individuals might have broader
obligations to be involved in improving society, due to the nature of the business organization its
primary and overriding social obligation is to its shareholders, and the shareholders could then use

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these profits for broader social ends if they so desired (DiMatteo & Dhooge, 2005, p. 45). Milton
Friedmans contention has its critics, however, beginning with claims that a business organization
has much broader obligations not only to shareholders but to all stakeholders. In DiMatteo and
Dhooge we can read of a study performed by Francis Fukuyama which demonstrated that the
most prosperous societies were also those societies with higher levels of trust.
Another contradiction of the myth of the amoral business organization is that if the cost of
repairing the environmental, social or other damage caused in the creation of profits is more than
the profits generated the business organizations net utility provided to shareholders could
actually be negative, even for profitable businesses.
ETHICAL CODES
While not necessarily philosophical, another way to standardize, monitor and control the ethical
risks of a business organization is to develop or adopt ethical codes. The CFA Institute Code of
Ethics and Standards of Professional Conduct provide very detailed examples of ways in which to
react to ethical dilemmas. One risk which many ethical codes face is becoming too legalistic and
rigid and practitioners focusing too much on the actual actions and procedures while overlooking
the broader philosophical considerations such as whether or not they are actually causing damage
or improving the lives of others. One way to avoid becoming stale, or legalistic is for the ethical
codes to be frequently updated with input from practitioners, while also providing training as to
the underlying philosophical reasons for the ethical codes (as is done with the CFA Institutes
ethical code).
APPLICATION OF BUSINESS ETHICS IN THE CASE OF NESTLS MARKETING
While the first moral philosophers proposed virtue ethics, and debates regarding virtue ethics are
interesting at the individual level, this field of study really doesnt shed much light on whether or
not Nestl incurred an ethical mistake in the marketing of their baby formulas. Of course courage,
temperance, justice, prudence, faith, hope and charity are important and there are elements in
which these fundamental virtues (and other) apply not only to individuals but also to corporate
actions. But I think that deontology and consequentialism are more appropriate in this case.
While the philosophical questions of meta-ethics are also rather intriguing, at some point the
philosophical conundrums need to be pushed aside and we need to accept certain things as being
good or bad without fully grounding the concepts of good and bad through reason and empirical
evidence. For example, nutrition for young children is good and the unnecessary deaths of
children are bad.
The case focuses considerably on when and how Nestl comply with the World Health
Organizations (WHO) Code. While focus on external codes can create discipline, clear guidelines,
measurable results, etc. this type of focus can also distract us from the broader questions of
whether the actions are ethical or not. In the specific case of the WHO Code, there are elements
such as no infant pictures on labels, no sampling to mothers, no point-of-sale advertising etc which

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seem to focus more on limiting Nestls sales than on safeguarding the health of vulnerable
children. In this regards, I think that Nestls focus on the WHO code, while politically viable does
not quite get to the root of the issue.
From a deontological point of view, it could be argued that since Nestls baby formula is healthier
than other alternatives that selling the baby formula is ethical. However, this case highlights the
difficulties of a legalistic and deontological approach in that different customers are reacting quite
differently to the same marketing.
From a consequentialist point of view, while the baby formula itself is healthy, if customers misuse
the product the net consequences of the marketing could be negative. In other words, there is an
ethical and moral responsibility to educate customers in how best to use the product. In this
sense, what is more important is actually education and training rather than items in the WHO
code such as removing pictures of babies from labels. From a utilitarian point of view, the sacrifice
required to improve the education of customers and the training of sales people does indeed
increase happiness or at least reduce suffering and unnecessary deaths, thus it would be morally
and ethically justified and I would even say required for Nestl to do a better job at informing
customers as to the benefits of natural breast milk, the dangers of contaminated water (and the
fact that their formula will not fix that), the importance of providing proper nutrition (for
customers who use too little nutrition), and constantly monitoring the way customers use and
misuse the product in order to help all their stakeholders derive the maximum benefit from their
product. This also makes business sense as well informed stakeholders would derive more value
and utility from using their product.
CONCLUSION
The key question for this case is whether or not Nestl was guilty of an ethical violation in the
marketing of their product. While the company claims that their baby formula has been
scientifically proven to be healthier than many alternatives, there are many vulnerable children
who were dying unnecessarily due to their parents misuse of the product. While it would be easy
(and partially justified) to lay the blame on the parents who are misusing the product, I do think
that a company engaged in business to vulnerable clients has the obligation to seek ways to avoid
ways for these clients to be damaged by the misuse of the produce. There are very few tragedies
as heart-wrenching as the unnecessary suffering and death of children. From the point of view of
virtue ethics courage, justice, charity and prudence seem to suggest that if we can solve
unnecessary suffering we should. From the point of view of deontology, solving unnecessary
suffering could be made into a universal maxim and from a consequentialist/utilitarian point of
view the increased happiness and reduced suffering would justify the effort to educate customers
in the proper use of the baby formula.

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9
REFERENCES

Aristotle. Nicomachean Ethics. In Hutchings, R., & Adler, M. (Series Ed), Aristotle II (pp. 339-436). In
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Encyclopedia Britannica: The University of Chicago.
Cateora, Ph., Gilly, M. & Graham, J., (2010). Nestl: The Infant Formula Controversy. In
International Marketing 16th edition (pp. 598-601).
DiMatteo, L. & Dhooge, L. (2005). International Business Law: A Transactional Approach. Chula
Vista, CA : South-Western College/West.
Hutchings, R., & Adler, M., (1952). Virtue and Vice. In Hutchings, R., & Adler, M. (Series Ed), A
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