Charity Commission asked to investigate Nestle deal with the London Marathon

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Media coverage: Civil Society Magazine (20 April 2011).

For information on the results of the complaint see Update 44 - click here.

Baby Milk Action has asked the Charity Commission to investigate sponsorship of the London Marathon (Sunday 17 April) by Nestlé, the UK's most boycotted company, after the London Marathon Charitable Trust said its sponsorship policy is confidential and refused to discuss the appropriateness of Nestlé as a sponsor. Commission guidance states: "Charities should be transparent about any relationship they have with a commercial partner and put in place the appropriate safeguards." When Baby Milk Action contacted the London Marathon Charitable Trust last year, the first time the water was branded as Nestlé Pure Life, to discuss the sponsorship policy and introducing ethical clauses if these did not exist, it was told: "The London Marathon’s sponsorship policy is confidential to the organisation of the event including the Race Director, CEO, Board of Directors and Trustees". All efforts to enter into discussion of the appropriateness of Nestlé were met with the response of 'no comment'.

Baby Milk Action did not ask runners to boycott the marathon (many runners raise money for good causes), nor did it advise boycotting the water as this could put health at risk. But it is calling for alternative water to be made available and for the London Marathon to be transparent about its sponsorship policy and introduce ethical clauses. Although it is unfeasible for Baby Milk Action to arrange alternative water points, a boycott supporter did set up a Nestlé-Free Zone water stop (see picture - click on image for hi-res version).

Nestlé, is one of the four most boycotted companies on the planet because it is accused of marketing baby milk with strategies that violate international standards. Yesterday (14 April), even Nestlé's newest board member, Ann Veneman, former head of UNICEF, acknowledged that Nestlé is not fully complying with the World Health Assembly marketing requirements and pledged to fight from within the company to change its marketing (click here). UNICEF has said that "Improved breastfeeding practices and reduction of artificial feeding could save an estimated 1.5 million children a year." Nestlé is trying to improve its image by sponsoring the London Marathon on Sunday 17 April 2011 with its 'Pure Life' bottled water brand, but is also attracting criticism over the impact of its bottled water operation.

Charity Commission guidelines on fundraising and sponsorship also state: 

"Charities should be particularly cautious as co-branding or closely associating the charity with a company can become problematic if the company is discovered to engage in unethical practices or criminal activity. Charities need to carefully research the commercial participator and should consider whether a partnership with the commercial participator is appropriate and in line with the charity’s values and objects."

The London Marathon Charitable Trust receives income from the Nestlé sponsorship via London Marathon Ltd. According to the Virgin London Marathon website:

The London Marathon Ltd is wholly owned by the London Marathon Charitable Trust and is responsible for organising the Virgin London Marathon, adidas Half Marathon, Bupa London 10000, Standard Chartered Great City Race and the adidas Women’s 5km Challenge. Its income comes from sponsorship, marketing, advertising, entry fees, TV etc. and after costs 100% of its surplus is handed to The London Marathon Charitable Trust who then award grants to recreational projects mainly in London.

Nestlé Chairman, Peter Brabeck-Letmathé, has highlighted his involvement in the United Nations CEO Water Mandate, but this received the Public Eye Greenwash Award in January 2010 for its role in covering up corporate malpractice (sponsored by the Berne Declaration and Greenpeace). Nestlé promotion of 'Pure Life' at the London Marathon comes after it was driven from the Edinburgh Fringe in 2006 where it sponsored the Perrier Award - Nestlé took over Perrier in 1992 and was targeted by celebrities such as Emma Thompson and Steve Coogan, winners of the award before Nestlé's takeover.

Baby Milk Action, which promotes the boycott of Nestlé in the UK, is urging runners to contact the organisers about their sponsorship policy and has produced a leaflet with information they can send or hand in.


Mike Brady, Campaigns and Networking Coordinator at Baby Milk Action, said:"We are disappointed that our efforts to discuss the Marathon's sponsorship policy with Trustees well in advance of the Marathon were rebuffed. People have to drink water doing a marathon and it is a serious concern that water with the Nestlé brand, which is boycotted by many, is the only water available to runners. We considered whether we could provide alternative water along the route, but it is simply unfeasible. Anyone running must put their own health first, but can send or hand our leaflets to the organisers to show they disagree with being forced to drink Nestlé water - for some it will be the first Nestlé product to have passed their lips for many years. It is a pretty sick way of Nestlé to force people to break their boycott and shows how desperate the company is."

 Nestlé Pure Life was launched in Pakistan in 1999. The marketing strategy began with a series of "awareness seminars," organised by Nestlé's PR company and involving key government officials who claimed that urban water supplies were contaminated and other bottled water then on the market was tainted - Nestlé's connection with the seminars was not revealed. Soon after the seminars, Nestlé unleashed its Pure Life sales force in Karachi, this handed out leaflets and samples backed by a billboard campaign with the slogan "welcome to purity." Having capitalised on the fears raised by the seminars, Nestlé is now distancing itself from them, claiming: "We didn't want to be perceived as stirring up controversy." The Managing Director of the Lahore Water Supply Company was quoted in the Wall Street Journal: "These foreign companies are misleading the people to make money."

For a detailed analysis of Pure Life in Pakistan see the 2005  ActionAid Pakistan report: "Drinking Water Crisis in Pakistan and the Issue of Bottled Water - The Case of Nestlé’s ‘Pure Life’"

Nestlé launched Pure Life water in Brazil shortly afterwards, demineralising water from a spring in the water park in the historic spa town of São Lourenço, which had an adverse impact on other springs and the tourism industry, leading to a mass petition which prompted a civil public action by the public prosecutor. Nestlé eventually stopped bottling Pure Life in São Lourenço, settled the case out of court under threat of daily fines and providing compensation to the town by refurbishing the water park.

Vulnerability maplegal opinion from a federal prosecutor exposed multiple breaches of federal laws, which, for example, prohibit the demineralisation of mineral water resources. Nestlé's bottling plant was shown in an environmental impact assessment to have been built in the area of 'maximum vulnerability' in the water park over the aquifer. Nestlé hired a spy to gather information on the Brazilian campaign and other campaigns by infiltrating a campaign group in Switzerland.

Corporate Accountability International issued a press release coinciding with Nestlé's 2010 shareholder meeting, highlighting that sales of Nestlé bottled water are falling, stating:

This past year, as more and more people joined the tens of thousands who have begun to question the value of bottled water, and as more communities began to challenge Nestlé’s attempts to gain control of water resources in their communities, Nestlé worked hard to convince individuals and communities that the company has turned over a new leaf, while also ensuring investors that the future viability of Nestlé’s bottled water business is sound.  However, consumers and community groups aren’t buying Nestlé’s line, or their water, and even some investors are beginning to doubt that Nestlé’s bottled water business will be viable in a climate where more and more people are turning back to their public water systems and rejecting Nestlé and other bottlers’ efforts to sell them ‘old water in new bottles’.

Nestlé Chairman, Peter Brabeck-Letmathé, launching his Creating Shared Value report at the 2010 AGM commented:"Water is an essential human need. People need better access to water, particularly in vulnerable regions." A coalition of campaigning organisations, known as the Nestlé Critics, submitted a report to the UN Global Compact Office regarding the last Creating Shared Value report in 2009 as this voluntary corporate responsibility initiative posts the reports on its website and has even taken part in joint events with Nestlé. The Nestlé Critics claim the Creating Shared Value reports are misleading and the apparent endorsement of them by the UN Global Compact is assisting Nestlé to continue violating the Global Compact principles of respecting human rights and the environment. See:

Nestlé's newest board member, Ann Veneman, former head of UNICEF, appointed at the company's AGM on 14 April 2011 was kept from meeting Baby Milk Action's Policy Director who wanted to ask her to reconsider joining the board or at least to make it conditional on Nestlé changing its baby milk marketing practices. Ms. Veneman joined the board, but afterwards pledged to fight from within to change Nestlé's marketing of breast milk substitutes and acknowledged Nestlé is not fully complying with the marketing requirements championed by UNICEF, according to media reports.

Mr. Brabeck boasts of his involvement in the UN Global Compact CEO Water Mandate, citing this as demonstrating his companies commitment to sustainable use of water. The initiative received the Public Eye Greenwash Award in 2010. See:

Nestlé is the target of a boycott over its aggressive marketing of baby milk. According to UNICEF"Marketing practices that undermine breastfeeding are potentially hazardous wherever they are pursued: in the developing world, WHO estimates that some 1.5 million children die each year because they are not adequately breastfed. These facts are not in dispute."

Improved breastfeeding rates could save more under-5 lives than universal provision of safe water, sanitation and vaccination, according to the Lancet Child Survival Series. The International Baby Food Action Network (IBFAN) monitors baby food companies against marketing standards adopted by the World Health Assembly and finds Nestlé to violate these systematically in its policies and practices. Baby Milk Action, which promotes the boycott in the UK, has put a four-point-plan to Nestlé to save lives and ultimately end the boycott, but this has been rejected by Nestlé. Baby Milk Action appealed to shareholders at Nestlé's AGM last week to stop management promoting baby milk with the claim that it 'protects' babies, when it is proven that babies fed on breastmilk substitutes are more likely to become ill and, in conditions of poverty, more likely to die. Nestlé's CEO, Paul Bulcke, defended the practice and dismissed Baby Milk Action's criticism of it.

For further information, contact Mike Brady, Baby Milk Action's Campaigns and Networking Coordinator, on 07986 736179 or Patti Rundall, Policy Director, on 07786 523493.

The following film from Corporate Accountability International and The Story of Stuff is being used by water campaigners to encourage people to return to using tap water. It includes information on Nestlé, Coca Cola, Pepsi and other companies.


Responses from Charity Commission, London Marathon and Nestle

The Charity Commission has responded to Baby Milk Action by directing us to the guidance quoted above and advising us to raise these matters with the Trustees. We will respond to the Charity Commission as the response we have now received from the London Marathon implies the guidance does not apply to the Marathon due to the separation of the Charitable Trust from the London Marathon Ltd., which it fully owns. This argument and the response from Nestlé appear in an article appearing in Civil Society Magazine - click here.

Mike Brady has posted the following comment on that article:

It is strange to read the arguments about the separation of the Charitable Trust and trading arm as justification for ignoring Charity Commission guidance on commercial sponsorship.  Baby Milk Action contacted the London Marathon after the 2010 event was sponsored by Nestlé Pure Life to try to discuss the sponsorship policy with the organisers, but was told "The London Marathon’s sponsorship policy is confidential to the organisation of the event including the Race Director, CEO, Board of Directors and Trustees". 

As a beloved national event, one might expect there to be a transparent sponsorship policy in place, regardless of the separation of roles. The event is not only branded with Nestlé Pure Life, Nestlé uses its sponsorship of the event in its Creating Shared Value Public Relations campaign, attempting to divert criticism of both its water bottling operations and the baby milk marketing activities which have led to the boycott that Baby Milk Action promotes. Nestlé Pure Life is the ONLY water the organisers make available to participants, meaning runners have to break their personal boycott if they are supporting the campaign so as not to endanger their health - we are not calling for people to boycott the event or refuse the water they need to stay hydrated. It is not feasible for Baby Milk Action to try to set up alternative water points, though there was one 'Nestle-Free Zone' set up by a supporter along the route this year. Picture with our press release at [above].

Nestlé Pure Life has been a controversial product since its launch in Pakistan and Nestlé stopped producing it in Brazil after a long campaign by the inhabitants of São Lourenço where it had its bottling plant (supporting documents with our press release - above).

Despite Nestlé assurances about its marketing of breastmilk substitutes in its statement, independent monitoring finds it systematically violates the marketing requirements. Examples of Nestlé's own marketing materials can be viewed on Baby Milk Action's website, along with analysis of the responses we receive from Nestlé when we raise these.

Nestlé refers to being listed by FTSE4Good, but does not mention that it was excluded from the listing since its inception and has been included now not through changing its marketing practices, but because FTSE4Good weakened its criteria in September 2010. As UNICEF said in response to the listing: 

"The evidence available to us suggests that all breastmilk substitute manufacturers currently violate the International Code routinely. We are therefore following the inclusion of Nestle on the index carefully and will be looking for evidence that their marketing begins to comply with the Code."

UNICEF has previously stated: "Improved breastfeeding practices and reduction of artificial feeding could save an estimated 1.5 million children a year."

The boycott is a tool, not an end in itself, and helps to force changes. We have put a four-point plan to Nestlé for saving infant lives and ultimately ending the boycott, but this has been repeatedly rejected. Nestlé prefers to try to improve its image by sponsoring good causes. When that happens we have to use it as an opportunity to expose Nestlé malpractice, while calling on recipients to consider introducing ethical criteria to sponsorship policies.

The guidance from the Charity Commission on transparency and care over commercial partners is sensible for all types of organisation, whether Charitable Trust or trading arm, and we hope all involved in organising the event and receiving income from the sponsorship will give it due consideration.