By Elizabeth Schulte | January 3, 2003 | Page 2
THE MANAGERS of multinational food giant Nestlé didn't get where they are today by letting money slip through their fingers. Even if they have to extort it from starving Ethiopians.
Nestlé is the largest food company in the world. And Ethiopia is the world's poorest country, where food shortages threaten to grow worse in the coming months than the famine that killed 1 million people in 1984.
Yet last month, Nestlé demanded that the Ethiopian government reimburse it for $6 million that it says its German subsidiary lost when the military regime of Col. Mengistu Haile Miriam took control of foreign-owned industries in the 1970s.
The $6 million amounts to a few hours' worth of revenue for Nestlé. But in Ethiopia--where per capita income is just $100 a year--the money could buy food for a month for more than 1 million people.
Nestlé's recent attempt to squeeze money out of a poor country isn't new. Over the last few decades, the company has spent millions of dollars promoting its dried milk products as a substitute for mothers' breast milk, despite the fact that it is a poor--and potentially deadly--replacement.
Milk substitutes like the one Nestlé peddles require water to make them. And because water quality is typically bad in these countries, the risk of contaminating babies with water-borne diseases is great. The aid agency UNICEF estimates that 1.5 million babies a year die from unsafe bottle-feeding. Yet Nestlé continues to aggressively market its dried milk products.
Public outcry over its latest attempt to rob a poor country forced Nestlé to promise last week that it would reinvest the $6 million in famine relief. But the fact is that it's not Ethiopians who owe Nestlé. It's the other way around.