Walmart-at-the-Crossroads-FINAL-06.04.15

Nestlé’s issues with labor do not only concern workers in its factories; it also
includes small-scale farmers. The company’s focus on increasing its share of markets has created
devastating consequences for small-scale farms. In Pakistan, Nestlé has practically established a
monopoly of the Ultra High Temperature (UHT) milk
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market, and in Peru, Nestlé controls around
80 percent of milk production.
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This market control has allowed Nestlé and Parmalat to force at least
50,000 small-scale dairy farmers out of their supply chains. Many small farms went out of business as a
result of Nestlé buying Brazil’s milk cooperatives during the 1990s.
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Besides directly putting small farmers out of business, Nestlé has cut its own costs by increasing
the cost burden on farmers. In Brazil, one way Nestlé increased farm costs is by demanding that
farmers install milk refrigeration tanks on their property. The smallest tanks need at least 100 liters of
milk per day to be filled, but the typical farm produces only 50 liters per day. Most small-scale farmers
could not afford to install the coolers. The excluded producers attempted to market their milk to
smaller processors and cooperatives and to use informal markets. However, the market dominance of
Nestlé and other multinational corporations meant that smaller processors were quickly going out of
business. This phenomenon, along with reduced farmer access to alternative milk marketing channels
due to the rise in UHT consumption, led to many farmers losing their milk income altogether.
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ii.
Environment
Although not directly related to dairy, Nestlé has recently come under criticism for its bottling of
water in drought-stricken California. The company buys water at the same rate as California residents
and then sells the bottled water “at one hundred times the profit.”
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Nestlé denies, however, that its
water bottling operations contribute to the drought.
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However, bottled water has a negative impact on
the environment beyond whether it is contributing to the drought in California or not. It takes 1.39
liters of water to produce 1 liter of bottled water, in addition to the three liters of water required to
produce the plastic for a half-liter bottle.
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This is not the first time that Nestlé has faced opposition to its extraction of water in order to
profit from selling bottled water, as, in the past 20 years, residents from Texas and Florida to Wisconsin
and Michigan have fought against Nestlé obtaining water rights.
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