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Wednesday, February 6, 2013

Nandu Nandkishore:Are There Two Nestles In The Philippines?



From Nestle Philippines Website
John Miller, CEO and Chairman for Nestlé Philippines, explained that Nestlé’s presence in the Philippines during the past 100 years has touched the lives of consumers, making an impact on Filipino families from generation to generation.
He said: “This relationship with the Filipino consumers, anchored on the quality of our brands and the role that these much loved brands have played in helping nurture and nourish Filipino families, is what led us to our centennial theme Kasambuhay, Habambuhay.”
History
In 1911, Nestlé and the Anglo Swiss Condensed Milk Company established its first sales office in Calle Renta, Binondo in the capital city of Manila.
During the Second World War from 1939-1945, Nestlé in the Philippines suspended its operations but continued after the war under the name of Filipro, Inc. importing brands such as Milo, Nido and Nescafé.
During the 1950s, the company experienced import difficulties due to government controls. It sold peanut butter, napkins, fruit preserves and fish sauce to keep operations going.
In 1960, Nestlé and San Miguel Corporation entered into a partnership named Nutritional Products, Inc. (Nutripro).  A few years later, its first factory started operations in Alabang, Muntinlupa, which manufactured Nescafé.
By 1977, Filipro, Inc. and Nutripro, Inc. merged as Filipro, Inc.  In 1986, this was changed to Nestlé Philippines.
In late 1998, Nestlé Philippines became a wholly-owned subsidiary of Nestlé S.A.
Principles (From Nestle's Global website)
Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:

1. Nutrition, Health and Wellness
Our core aim is to enhance the quality of consumers lives every day, everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We express this via our corporate proposition 'Good Food, Good Life'.
2. Quality Assurance and product safety
Everywhere in the world, the Nestlé name represents a promise to the consumer that the product is safe and of high standard.
3. Consumer Communication
We are committed to responsible, reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. We respect consumer privacy.  
4. Human rights in our business activities
We fully support the United Nations Global Compact’s (UNGC) guiding principles on human rights and labour and aim to provide an example of good human rights’ and labour practices throughout our business activities. International Labour Organisation
5. Leadership and personal responsibility
Our success is based on our people. We treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. We recruit competent and motivated people who respect our values, provide equal opportunities for their development and advancement, protect their privacy and do not tolerate any form of harassment or discrimination. 
6. Safety and health at work
We are committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain. 
7. Supplier and customer relations
We require our suppliers, agents, subcontractors and their employees to demonstrate honesty, integrity and fairness, and to adhere to our non-negotiable standards. In the same way, we are committed towards our own customers. 
8. Agriculture and rural development
We contribute to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable.
9. Environmental sustainability
We commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle we strive to use natural resources efficiently, favour the use of sustainably-managed renewable resources, and target zero waste.  
10. Water
We are committed to the sustainable use of water and continuous improvement in water management. We recognise that the world faces a growing water challenge and that responsible management of the world’s resources by all water users is an absolute necessity. 

The Case Study
Consider this case involving the Company and a distributor, Forefront IT Trading Corp., owned by Filipino investors who are now complaining of unfair and unethical business practices by their foreign partners. In a disgusting display of corporate bullying, the multinational refused to pay Forefront's more than P12 million in collectibles unless it signed a Release and Quit Claim dropping all other legitimate claims. This when a ranking official of the foreign firm had promised, verbally, the settlement of all just and reasonable claims.
The amount consisted of close to P1 million in withheld expanded value-added tax (EVAT) for 2007 that the multinational should refund to Forefront, plus P11.07 million representing performance incentives, advances made by Forefront for the company's promotional activities and cost of products taken back by the multinational.
The multinational allegedly took back the products in Forefront's possession after terminating the distributorship agreement when the latter protested the meddling and unprofessional conduct of the multinational's sales official assigned to it. The distributor had wanted a replacement.
It turned out that the multinational's sales official was carrying on an extramarital relationship with a Forefront executive, a married man. She exploited this relationship to secure unusually large orders of her employer's products and even slow-moving items that Forefront had to dispose of even at cost, even to the extent of forgoing profits. Santa Banana, she even succeeded in passing on to Forefront some poorly paying accounts not included in the original agreement. All these eventually resulted in huge losses to the distributor.
This came to a point where Forefront experienced difficulties in meeting its payroll, the 13th month pay for December 2007, and separation benefits for some 80 employees who had to go as a result of severe financial stress.
When advised of the affair and the resulting conflict of interest situation, the latter simply dismissed the matter as "a purely personal affair between two consenting adults," and ignored the request that their sales official be replaced. Yet, the multinational's own Corporate Business Principles and Code of Conduct states, among other things, that the company "requires its management and employees to avoid even the appearance of impropriety in its business relationships on behalf of the company."
"All business depends upon men fulfilling their responsibilities." Mahatma Gandhi