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Nestlé Puts Public Relations Before Precaution in China Milk Scandal

Posted to the IUF website 24-Sep-2008

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The Olympics have come and gone, and melamine, the toxic chemical used in the production of plastics, fertilizers, fire retardants and inks, among other products, is back in the news. Melamine, which can cause acute kidney failure when ingested, has become a favorite ingredient of Chinese food manufacturers to boost apparent protein content in adulterated products. In early 2007, it turned up in North American pet foods, including those marketed by Nestlé's Purina brand. It periodically surfaces in animal feed and even toothpaste. Now it's the culprit in the widening scandal arising from the contamination of Chinese-made milk products, fresh and powdered, which has resulted in the death of at least 4 babies, sickened over 53,000 and hospitalized some 13,000.

While other dairy producers initiated recalls and suspended production, Nestlé, putting public relations before safety, asserted that "that none of its products in China is made from milk adulterated with melamine." Shortly thereafter, the Hong Kong government found traces of melamine in a Nestlé milk product manufactured in mainland China. The traces were low, according to the government authorities, but it was recommended that it not be given to children. Following on a recall by leading supermarket chains, the product was eventually recalled at the request of the government. Nestlé responded with a press statement that all its milk products manufactured in China are "absolutely safe".

Massive, often fatal food contamination scandals have become a matter of such routine in China that no company, operating directly or through a joint venture, can claim to be manufacturing safely unless all stages of production and distribution are monitored for every possible source of contamination and adulteration. The policy of official laxness bordering on complicity was summed up in the official China Daily, which observed that the largest dairy manufacturers were exempt from safety inspections on the grounds that it was necessary to assist "internationally competitive producers of high quality products" by…sparing them regular testing. The explosive growth of China's booming market for dairy products, which saw annual sales double over the last five years to USD 18 billion, was an important spur to this regulatory exemption. Several Chinese commentators (since banished from the internet) have suggested that melamine adulteration was one way for companies to pass on rising input prices.

In this context of widespread corruption, criminally loose standards and the total absence of independent worker organizations to monitor worker and consumer health and safety, companies bear a particular responsibility. Repeated iterations of product safety aren't enough. Death and illness are the price of laxness

Safety concerns with Nestlé milk products aren't new. In 2002, Nestlé imported spent milk powder to Colombia, where it was repackaged (with new best before dates). Health inspectors found it before it was released for sale. Nestlé said it was repackaging the powder for health reasons.

In 2005, Chinese authorities detected excessive levels of iodine in Nestlé infant milk formula. Nestlé contended that the levels were "only a little bit higher" than the prescribed limits, and had to be dragged into a product recall and eventual apology. In 2005 again, this time in Europe, 30 million litres of Nestlé baby milk products were confiscated in Italy and the products were recalled in four other European countries when ink was found to be leaking off the packaging into the contents. Tetra Pak, maker of the packaging, claimed it had been aware of the problem and changed its production methods in September. The recall came only in November, after Italian police began confiscating the product from supermarkets, depots and lorries. Nestlé CEO Brabeck called this "a tempest in a teapot", insisting that the product posed no health risks.

Other transnational producers with operations in China have hardly covered themselves with glory in this affair - there are significant gaps in the chronologies spanning the discovery of the contamination and the effective implementation of product recalls and suspensions of productions. But Nestlé - the world's largest food company - has again distinguished itself by its dogged insistence on spin over precaution.