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From inventing the need for mass-scale baby formula leading to the deaths of infants, to redirecting much needed water from impoverished areas to bottle and sell back to the same communities, to exploiting child labor and slavery, Nestlé will stoop to any moral low to make a buck.

This article inaugurates Ms. Gjovik’s new column for CovertAction Magazine spotlighting the abuses of U.S. multinational corporations worldwide.—CAQ Editors

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Corporations like Nestlé are essentially doomsday machines: man-made creations that will ultimately destroy humanity if allowed to continue as they are. Multinational corporations are required by law to place the financial interests of shareholders above all other matters, even if that requires them to prioritize the bottom line above the common good. In this nightmare of our own creation, if it is more cost-effective for corporations to commit mass atrocities and pay a fine, than to not commit atrocities, the corporation is compelled to commit atrocities to ensure shareholder returns.

Further, this maximization of profit through unhinged business practices and investment tactics creates a cycle of destruction further fed by governments and institutions relaxing rules to entice companies to do business in ways that financially benefit that government. This enables the businesses to create more profit by cutting corners around labor rights, safety protections, and environmental standards. As negligence is further normalized, governments must entice businesses with more concessions, which encourages even worse behavior from corporations. Governments and business then race each other to the bottom in a destructive spiral that harms everyone.

In the Unites States, corporations claim a legal status as if they were human beings. While this is a fictional concept, if the corporation Nestlé were a person—Nestlé would be the worst kind of person, someone you would never want to be in the same room with. Nestlé is the American Psycho of corporations.

Yet, a company like Nestlé only exists because of the acquiescence and facilitation of its gross misconduct by governments and society. This case study on Nestlé’s business practices highlights some of the most egregious behavior by corporations.

A Corporation Called Nestlé

Founded in 1866 by Henri Nestlé, today the Nestlé corporation owns more than 2,000 brands.^[1] Nestlé is the world’s largest food company and is one of the most multinational of companies, with more than 450 manufacturing facilities in more than 79 countries, sales in 186 countries, and employment of 276,000 workers. In 2021, Nestlé reported $87 billion in sales and $22 billion in global profit. Around 30% of Nestlé’s total sales came from the United States, where Nestlé reported $26 billion in sales. ^[2]

The Nestlé name is widely associated with a controversy. Nestlé’s success is arguably due to its incredible brutality—from inventing the need for mass-scale baby formula leading to the deaths of infants, or redirecting much needed water from impoverished areas to bottle and sell back to the same communities, to exploiting child labor and slavery to gather ingredients for consumer products it admits have no nutritional value—Nestlé is an incredibly unethical company.

Yet, most of us probably regularly purchase Nestlé products, even if we think we avoid doing so. Nestlé’s owns an impressively extensive list of popular brand names including: Acqua Panna, Alpo, Beneful, Blue Bottle Coffee, Boost, Buitoni, Carnation, Cheerios, Coffee Mate, DiGiorno, Dreyer’s, Fancy Feast, Garden of Life, Gerber, Haagen Dazs, Hot Pockets, Kit Kat, Lean Cuisine, Nature’s Bounty, Nescafe, Nespresso, Nesquik, Ovaltine, Perrier, Purina, Pure Life, Stouffers, Starbucks Coffee at Home, Sweet Earth, San Pellegrino and Tombstone Pizza.^[3]

Nestlé is also a major shareholder in L’Oréal, the multinational cosmetics conglomerate, which Nestlé reports as an “associate” on its financial reports.^[4] L’Oréal itself owns many popular personal care brands like Lancôme, Garnier, Maybelline, Essie, Redkin, NYX, CeraVe, Urban Decay, and Kiehl’s.^[5]

“Nestlé Kills Babies”

Nestlé’s most infamous scandal is around its baby formula products.

If mothers are able to breastfeed their babies, they are advised to provide their babies only breast milk for the first six months of life.^[6] However, in the 1970s, Nestlé began sending representatives dressed as nurses to hospitals in impoverished countries to promote the company’s baby formula as replacement for breast milk, including sending families home with one free can. In these areas, the water that must be used to mix up the formula and clean the bottles was not safe.^[7] Nestlé convinced these mothers to reject their own breast milk in favor of its infant formula.^[8] Then, the mothers could not switch back to breastfeeding because, after one can, it was too late in the lactation cycle.

The result was an estimated one million dead babies every year from malnutrition or diseases contracted from dirty water or bottles.^[9] In 1974, a report was published in Switzerland titled “Nestlé Kills Babies.”^[10] All of this led to massive boycotts in the late 1970s and early 1980s. Nestlé insisted that the real problem was only access to water, while at the same time beginning to seize public waters for bottling and polluting the water that remained.^[11]

In May 2007, an investigation found evidence Nestlé was still engaging in questionable infant-formula marketing practices in Bangladesh.^[12] Then in 2011, Nestlé was investigated for bribery in the Chinese baby formula market—including bribing medical staff to promote its infant formula to new mothers.^[13]

Undeterred, in April 2012, Nestlé deepened its involvement in the market by purchasing Pfizer’s baby formula business (SMA) for more than $11 billion.^[14] In 2019, Nestléʼs own report still found at least 107 instances of non-compliance with international baby milk marketing rules.^[15]

Last year, the World Health Organization and UNICEF issued a report finding ongoing “extensive and aggressive marketing practices used by the formula milk industry to target new and prospective parents” which “exploit emotions, the fears and the ambitions of women and families at a time they’re potentially most vulnerable.”^[16] Nestléʼs baby formula practices are a stunning example of free-market murder over decades.

Bottling the Commons

In poor regions, Nestlé and others have been taking water from aquifers, springs, rivers and lakes—and putting it in plastic bottles or turning it into flavored and sugary drinks—then dumping their used and dirty water back into water sources. Locals are then not able to drink tap water and end up paying extortionate prices to the European and U.S. corporations for bottled versions of their own previously uncontaminated tap water.^[17] In 2020, Nestlé reported $6.4B in bottled water sales.^[18]

For years, activists have accused Nestlé of lining its own pockets through back-door privatization of public water supplies. Access to water is a human right.

Corporate privatization of the commons seizes a public resource and converts it to a private good, and Nestlé has been implicated in this for decades. In fact, the source of America’s corporate water crisis can be traced back to 1976 when Perrier opened an office in New York.^[19] The firm partnered with a U.S. executive who had recently left Levi Strauss, and they built a marketing campaign to convince Americans to pay for water.^[20]

Nestlé acquired Perrier in 1992 for $2.6B.^[21] At that time, Perrier had issued a recall due to reports of benzene in the bottled water and also faced a fine in New York for false advertising.^[22] Perrier was apparently a culture fit for Nestlé.

By 2016, bottled water sales had surpassed soda as the largest U.S. beverage category, with Americans consuming 12.8B gallons that year.^[23] In addition to seizing public waters, Nestlé’s manufacturing process uses far more water than the output provides (only about 70%). Meanwhile, Nestlé also dumps a significant amount of now polluted water back into water basins and aquifers.^[24]

While other companies moved their operations out of drought-ridden California, Nestlé’s CEO said he would pump more out of the San Bernardino National Forest if he could. Nobody actually knows how much Nestlé extracts from this source—which it has been doing without a permit since 1988—paying only $524 a year to bypass the requirement.^[25] In 2021, California’s Water Resources Control Board asked Nestlé to stop the unauthorized water diversions after a probe revealed multiple violations and depleted resources.^[26]

Nestlé has shown no shame or contrition for any of this. In fact, former Nestlé chief executive and chairman Peter Brabeck called water a “grocery product” that should “have a market value.” He later amended that, arguing water can be a human right, but only 25 liters a day.^[27] Today, Nestlé’s website continues to argue that “non-essential” use of water is not a human right and should “carry a cost.”^[28]

Slavery-made

Nestlé’s unlawful business practices are not limited to fatally unethical marketing. Nestlé has also been implicated in child labor.

The U.S. Department of Labor reports that more than 1.5 million children work in the cocoa industry in Ghana and the Ivory Coast, which produce 60% of the world’s annual cocoa harvest. More than 40% of those children are exposed to dangerous working conditions, including chemical usage, burning fields, swinging machetes, and heavy lifting—activities that international authorities consider the “worst forms of child labor.”^[29]

In Nestlé USA v. Doe (2021), former child slaves who were trafficked into Côte d’Ivoire to work on cocoa farms filed suit under the Alien Tort Statute (ATS) against Nestlé USA.^[30]They accused the corporation of aiding and abetting the illegal enslavement of thousands of children on cocoa farms in Nestlé’s supply chains.^[31]

Nestlé USA effectively controls much of the cocoa production in the Ivory Coast and operates “with the unilateral goal of finding the cheapest source of cocoa in the Ivory Coast,” resulting in a “system built on child slavery to depress labor costs.”^[32] Nestlé knowingly profited from the illegal work of children and Nestlé’s contracted suppliers were able to provide lower prices than if they had employed adult workers with proper protective equipment.^[33]

In Nestlé’s Petition for Certiorari, Nestlé’s lawyers did not deny there was slavery in its supply chain but instead argued, among other things, that corporations cannot be liable for violations of customary international law or human rights violations.^[34] Nestlé lawyers extensively referenced the Nuremberg Trials in their argument for impunity, desperately pleading that even the corporation that supplied Zyklon B gas, which the Nazis used to kill millions, was not convicted during that trial.^[35]

During oral arguments, the U.S. Justice Department, on behalf of the U.S. government, supported Nestlé. Deputy Solicitor General Curtis E. Gannon contended that a new act of Congress would be needed to create liability for domestic corporations under the ATS (liability which the lawyer described as corporations being “discriminated against”).^[36]Gannon, on behalf of the United States, said the case against Nestlé alleging child slavery could “threaten foreign affairs interests” for the U.S. government.^[37]

Upon inquiry from Chief Justice John Roberts as to whether the U.S. government believes a corporation could ever be liable for setting up a U.S. corporation and sending U.S. employees to the Ivory Coast for the express purpose of setting up a cocoa farm that uses child slavery, Gannon responded, “Well, I think that it—it depends on how much conduct happens in the United States and how much conduct happens overseas.” ^[38]

Deputy Solicitor General Curtis Gannon, the U.S. government’s lawyer, famously authored the Justice Department memorandum approving President Trump’s “Muslim Ban” (Executive Order 13769) in 2017, when he was Principal Deputy Assistant Attorney General for DOJ’s Office of Legal Counsel. Before joining the Justice Department, Gannon worked at the infamous union-busting firm Gibson, Dunn & Crutcher.^[39] 

Nestlé USA v. Doe was dismissed in favor of Nestlé.

The decision was the latest in a series of U.S. rulings imposing strict limits on lawsuits brought in federal court based on human rights abuses abroad.^[40] To make matters worse, which is only possible with the depravity of a corporation like Nestlé, the company was also alleged to have orchestrated a chocolate price-fixing conspiracy, violating antitrust laws in the sales of its products manufactured with child slave labor.^[41]

Nestlé’s human slavery supply chain is not exclusive to chocolate. In 2020, a documentary exposed Nespresso’s supply chain use of child labor on Guatemalan farms.^[42] The documentary visited seven farms linked to Nespresso and found children working eight hours a day, six days a week, and who looked as young as eight years old.^[43]

Earlier, investigations also found migrants were lured by false promises to work in Thailand’s seafood sector, then kept in debt bondage and degrading conditions. When workers died on the job, it said the bodies were simply “thrown into the water.” In 2014, Nestlé confirmed the forced labor was part of its supply chain in Thailand.^[44]

Waste… All the Way Down

Nestlé’s misconduct also includes degradation of the environment and a direct role in causing the current climate crisis.

Nestlé’s plastic packaging is produced from plastic resin created by petrochemical companies like Exxon, Total, Aramco and Shell. The process of manufacturing plastic, as well as the extraction of the raw materials for it, releases enormous amounts of carbon dioxide, approximately 108M metric tons per year.^[45]

Plastic also enters into the product. Concentrations of microplastic in bottles of Nestlé Pure Life water were as high as 10,000 pieces of plastic per liter of water, the highest of any brand tested.^[46] Some of the microplastics the researchers found in Nestlé’s water included polypropylene, nylon, and polyethylene terephthalate.^[47] Nestlé was sued in 2018 over the high levels of microplastics, with plaintiffs alleging Nestlé “intentionally, negligently and recklessly concealed and omitted the truth” about the plastic contamination.^[48]

Nestlé released a statement saying that it had “ambitions” for its packaging to be 100% recyclable or reusable by 2025. However, environmental groups and other critics pointed out that Nestlé had not released clear targets or a timeline to accompany its ambitions, nor made additional efforts to help facilitate recycling by consumers. ^[49] Greenpeace released a statement saying,

“Nestlé’s statement on plastic packaging includes more of the same greenwashing baby steps to tackle a crisis it helped to create. It will not actually move the needle toward the reduction of single-use plastics in a meaningful way, and sets an incredibly low standard as the largest food and beverage company in the world.”^[50]

In the organization “Break Free From Plastic”’s 2020 report, Nestlé was named one of the world’s top plastic polluters for the third year in a row.^[51] Nestlé even admitted that most of its bottles are not recycled, even while Nestlé concurrently flooded the market with misleading advertisements claiming the opposite. Only about 31% of plastic bottles end up getting recycled, creating millions of tons of garbage every year, much of which ends up in landfills or the ocean.^[52]

A single plastic bottle can take anywhere from 450 to 1,000 years to decompose in a landfill.^[53]

After so much controversy, Nestlé largely divested from its North American water-bottling hustle, selling most of the business in 2021.^[54] While Nestlé is no longer the face of the U.S. bottled water problem, it is still responsible for the damage to the environment and the terrible systems it put in place.

[Source: boucherie-abolition.com]

Nestlé was also caught purchasing palm oil from mills with reckless means of production, including chopping down millions of hectares of forests and removing Indigenous peoples from their lands.^[55] In 2010, Greenpeace campaigned for Nestlé to end deforestation in its supply chain.

Nestlé promised to do so by 2015, but in 2017 Nestlé noted 47% of its palm oil still came from problematic plantations.^[56] Then in 2019, Nestlé was also accused of sourcing palm oil from producers linked to the forest fires in Indonesia.^[57] A recent Global Witness report documented the still ongoing harm, terror and impoverishment of communities due to corporate pursuit of palm oil, including by Nestlé.^[58] Rest assured, Nestlé still claims to be “working hard” on the issue.^[59]

[Source: palmoildetectives.com]

Further, a former Nespresso executive warned in 2016 that Nespresso pods create extensive waste. Made from a combination of plastics and aluminum, the coffee pods are not biodegradable. It can take between 150 to 500 years for the aluminum and plastic capsules to break down in a landfill. In order to recycle the pods, the aluminum capsules have to be shredded, the coffee has to be taken away with water, the varnish has to be burned and the aluminum has to be re-smelted.^[60]

Nespresso capsules are not pure aluminum due to Nestlé’s intellectual property and anti-competitive interests: The capsules contain silicon as part of a patent which was used to prevent rivals from making their own pods that could work in Nespresso machines.^[61] As of 2019, 70% of Nespresso pods were assumed to be headed to landfills.^[62]