don’t push it · the profits of bms companies are fuelled in part by marketing practices that...

Don't Push It: Why the formula milk industry must clean up its act 1

DON’T PUSH ITWHY THE FORMULA

MILK INDUSTRY MUST

CLEAN UP ITS ACT

FRANCES

MASON

November 2018

OUR REPORT IS ENDORSED BY

February 2018Don't Push It: Why the formula milk industry must clean up its act 2

OBJECTIVES OF RESEARCH

Bringing to life why this matters for infants

and young children

Demonstrating the continued growth of

global sales of BMS

Establishing how the BMS industry

systematically undermines breastfeeding



• 823,000 child deaths prevented

• 20,000 maternal breast cancers

prevented

• Nearly 50% of diarrhoea

episodes and 1/3 of respiratory

infections avoided

• Reduces death from necrotising

enterocolitis in neonates

• $1 invested in breastfeeding =

$35 in economic returns

• In China, India, Indonesia,

Mexico and Nigeria the

estimated economic cost

amounts to almost $119 billion

per year

The Case for

breastfeeding…

International Code of Marketing of Breastmilk Substitutes &

subsequent WHA Resolutions

The Code is designed to prevent companies from promoting infant

formula, other milk formulas and food that fully or partially replaces

breastmilk.

It includes:

• No promotion to the public –

• no direct contact with pregnant women, mums of infants and children up

to 3 yrs

• no advertising

• No gifts to mothers or health workers

• No promotion in health care facilities or to health care professionals (HCPs)

• No free samples to pregnant women, mums of infants and children up to 3

yrs of HCPs.

• No promotion of complementary foods before they’re needed.

• No sponsorship of HCP meetings or scientific meetings by companies

• Adequate labelsFebruary 2018Don't Push It: Why the formula milk industry must clean up its act 5

COMPANIES REVIEWED

6.Don't Push It: Why the formula milk industry must clean up its act February 2018

Acquired by RB in 2017:

GROWTH OF BMS GLOBAL SALES

Global market in BMS is seeing a 5-fold increase

in 2 decades

Marketing expenditure may be as high $17

billion

Evidence that aggressive marketing is driven

from most senior levels

Leading Investors have more than $110 billion

invested


A BOOMING INDUSTRY

• 2009 recession baby food continued to grow by

7%

• Growing 3 x as quickly as the global economy

The fastest-growing packaged food category…

• Sales of packaged food = 12.5% growth over 5

years; milk formula = 57% growth

• In Singapore – marketing expenditure increased

by 42.4% between 2010 and 2014


WE RECOGNISE THAT…• Milk formula has a positive role to play in the

right conditions

• There is a recognised medial need for some infants to be

formula-fed

• Some parents choose to give infant formula for a number

of reasons

• Not all the blame for the rapid rise in milk

formula consumption lies with the

manufacturers – other factors include:

• Rising incomes

• Urbanisations

• Increased female participation in the labour force


Primary DATA sources

10.Don't Push It: Why the formula milk industry must clean up its act February 2018

Don't Push It: Why the formula milk industry must clean up its act 11February 2018

BREAST-MILK SUBSTITUTE COMPANIES’ POOR PERFORMANCE ON CODE COMPLIANCE

Evidence of Violations…


ATNI surveys

TOTAL NUMBER OF NON-COMPLIANCES

IDENTIFIED FOR IN-COUNTRY

ASSESSMENTS

EVIDENCE OF VIOLATIONS

MEXICO NETCODE (2016)

10% of women received free samples

52% of health facilities advertised BMS

CHILE NETCODE (2017)

80% of mothers saw TV adverts (against the law)

75% HCPs in hospitals had BMS company reps visit, 75% received milk

samples

ECUADOR NETCODE (2017)

Of 6 forms of promotion which violate the Code:

• Nestle employed 5

• Danone, Abbot and Mead Johnson employed 4


“I used Bonna [infant formula] because I saw it on TV commercial and that’s why I tried it. It’s hard to budget because we don’t have enough income”

Leslie in Manila, Philippines, mother

Xian

La Min fed San Sundari formula after

being told by the nurse that it would

improve her baby’s IQ.

Abbott spent $486,460 on advertising its

Gain IQ Similac brand in Myanmar, making

it the biggest advertising spend in the

country.ref: Media monitoring of breast milk substitutes, Country report: Myanmar, page 7,

http://aliveandthrive.org/wp-content/uploads/2016/10/Media-Scan_Myanmar.pdf

http://aliveandthrive.org/wp-content/uploads/2016/10/Media-Scan_Myanmar.pdf

EVIDENCE OF VIOLATIONS…

This Enfa promotion by Mead

Johnson (owned by RB) on

Facebook offers pregnant women a

free gift package that includes milk

for mothers.


Former Mead Johnson Chief

Executive, Kasper Jakobsen

“We have to wait for

babies to be born

that we capture. That

can then go through

our acquisition,

retention and

extension model.”


“We need to continue to build

the brand…in order to beat the

market growth”

Danone Chief Financial officer,

Cecile Cabanis

EVIDENCE OF

VIOLATIONS

Happy 1st birthday. We wish your

child to be strong and happy.

Introduce Dumex Dugrow 1 plus for

child 1 year old and up. It has 25 mg

of DHA and 28 kinds of fruits and

vegetables. This helps your child to

be strong and happy. Call to get free

sample at 02-740-3400.

Children should receive 100 mg of

DHA per day according to the

recommendation of WHO and

EFSA

This SMS message was received by a mother in Thailand

from Dumex, owned by Danone. It promotes a Dumex

product for infants of one year and over, and promises

to help the infant be ‘strong and happy’. It also offers a

free sample

EVIDENCE OF VIOLATIONS…

This Nestlé online promotion offers

new mothers who register a free trial

of formula.


Nestle Chief Financial Officer

Francois-Xavier Roger

We have “increased

marketing spend”

and “still ambition

to do more”

BMS COMPANY TACTICS

ADVERTISING: The belief in equivalence, in artificial breast

milk is “perhaps the single most powerful myth ever created”

HOSPITAL DISCHARGE PACKS with free samples.

USA study (2014) showed 81% mothers received formula in

discharge packs.

BUILDING A RELATIONSHIP WITH MUMS –

• Company Facebook pages

• Free samples of formula on children's first birthday

• Mobile apps


BMS COMPANY TACTICS

INFLUENCING THE INFLUENCERS: Companies sponsor

events or individual health professionals

CROSS PROMOTION: Packaging infant milks and follow-on

products almost identically.

• 1/3 of mums in UK said they didn’t know the difference

• 16% of mums said they used FUF for <6 mth

• 2/3 FUF & GUM in Cambodia, Nepal, Senegal & Tanzania

under a given brand used similar colour schemes, brand

names & designs.


CODE COMPLIANCE IS POSSIBLE

ATNI found:

• advertising of BMS was “virtually

non-existent”

• no point-of-sale promotions in

shops;

• company representatives had little

direct contact with women or

healthcare workers.

• no incidences of non-compliance

on product labels.

Breastfeeding is higher than the

global average.


Expert, high-level contribution from

UNICEF & WHO

WHA 69.9

ROLE OF INVESTORS

Largest global fund management firms have more than $110 billion

invested in these 6 companies.

The profits of BMS companies are fuelled in part by marketing practices

that directly – and profoundly – harm children.

Investors have a transformational role in motivating companies to take

positive action.

2 reasons why investors should take a new look at this:

1. only recently that the full social and economic costs of low

breastfeeding rates have been more fully understood.

2. the recent advent of the ATNF BMS Index and NetCode surveys we

now have the means to systematically quantify and track company

compliance and the gap between policy and practice


FTSE4GOOD

Ethical Investment index:

• Nestle joined in 2012

• Danone joined in 2016

• RB hope to join 2018 / 2019

Now must be the time to tighten the criteria:

• On lobbying

• Ensuring company sponsorship of HCPs is not allowed

• Prohibiting cross-promotion of formula & toddler milks


WE RECOMMEND THAT:

Governments should incorporate the Code and subsequent resolutions fully into

their laws and regulations and should invest in independent monitoring, free from

commercial interest, and effective enforcement mechanisms.

The chief executives of all six global manufacturers and distributors of

breastmilk substitutes should publicly commit to upholding the Code and its

subsequent resolutions, and agree to meet targets set to achieve full compliance.

Investors should recognise that aggressive marketing harms families, infants and

young children globally and to use their influence to encourage companies to

comply with the Code.


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