Ireland’s €1.2bn infant formula industry has been accused of exploiting fears among vulnerable populations to gain market share and adding unnecessary extra ingredients purely to charge a premium price.
A report published today points the finger at the world’s top four infant formula producers, three of which — Nestle, Danone, and Abbott — have plants here. It says their practices, while legal, are unethical and in breach of a voluntary World Health Organization code on the marketing of breastmilk substitutes — a claim the companies deny.
The report, by the non-profit, UK-based Changing Markets Foundation, singles out Ireland because of the rapid growth of the industry here and its aggressive targeting of the Chinese market.
Ireland supplies 20% of the world’s infant formula and is the second biggest exporter to China where a contamination scandal in 2008 and concerns about pollution have left Chinese parents fearful of buying domestically produced formula.
The report says Irish formula commands a higher price there because it is heavily marketed as coming from a green and clean country.
Nusa Urbancic, the campaigns director of the Changing Markets Foundation, said all infant formula is highly regulated to ensure all brands meet nutritional requirements, so there is little basis to claim Irish products are superior. She said clever marketing is used to create that impression.
“Ireland’s strategy to promote itself among Chinese consumers as a pure and green island is built on the fact that Chinese parents are very concerned about environmental issues in China,” said Ms Urbancic.
“Chinese parents are led to believe they must have premium products and products produced in the West and companies really misuse this concern.”
The report found that using the most expensive formula would cost Chinese parents 40% of an average salary while it would cost just 1%-3% of an average salary in Europe.
Another industry tactic identified in the report is the creation of different and more expensive varieties of formula with extra ingredients which claim to make it closer to breastmilk, to represent the latest developments in nutritional science, to satisfy hungrier babies, promote better digestion, and aid sleep.
“There is little nutritional science and few beneficial health considerations behind their extensive product ranges,” states the report.
The authors call for greater regulation of the industry worldwide.
In Ireland, infant formula cannot be discounted or included in other promotions and all advertising carries notices stating that breastfeeding is the best option for babies where possible.
Danone said it could not comment without seeing the report but pointed out that the company was part of the FTSE4good initiative, a stock market listing of companies deemed to have met ethical standards.
Nestle had not responded at time of publication but the company was the first infant formula producer to meet the FTSE4good standards.
Abbott did not reply but has a written policy which states: “Abbott is committed to ethically marketing our products and ensuring that our practices comply with the laws and regulations of the countries where we do business.”
The companies also say they support the World Health Organization’s code for the marketing of breastmilk substitutes which is voluntarily adopted by individual countries.
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