Thursday, September 2, 2010

What multinationals like Nestle want

When you walk around in a mall, you see these small booths and big stalls and stores where they sell all sorts of items.

When you walk pass by, you have promo girls saying, "Bili na, sir (or "Would you like to buy something to you white guys who can't speak the local language)."

Even the real estate stalls where they sell condo units? What they really want to say is, "We want your money."

So when prospective distributors come to multinationals, these companies, all they see is money, opportunity, and money. They want your money. They want everyone else's money. They want money. Yes, that's what they want. Even the birds and the bees because they know they can slap a tag on it say, SM Bonus or Nestle, then make a gazillion bucks.

Business. That's how it is. Money makes the world go round. Not anything else although physics and science will tell you otherwise.

Now they enter into supposedly simple things like distributors' agreements except that it is so slanted against the distributor because of unrealistic prices set by the sales director. Failure to comply means termination of a the relationship.

Then during a marathon they recently sponsored there was a news blackout after a runner expired!

They not only want your money but they want to suppress the truth.

Wednesday, July 28, 2010

It's an epidemic (or maybe more accurately, a culture of greed & lies)!

Remember what we were saying about Philippine distributors of Nestle products getting shafted by unethical quotas, bullying tactics (Fear Factor these multinationals are fans of), and unreasonable pressure unbecoming of a partner? Well there are a lot of them out there but are afraid of of taking on the big sonofagun. That is why they are stalling on the FDII case. But now they will be fighting on another front this time with the big dog -- Banco De Oro that is owned by the Sy family of SM Malls fame (yeah we aren't a fan of them either because of their corporate practices). BDO has been assured by Nestle that one of its distributors is in the pink of health etc etc etc (with a nod towards Yul Brynner). TWICE. Except they are not because of the same shit they pulled on FDII.

So BDO has taken this to court. And what could this mean if Nestle don't cooperate? Say goodbye to your products in all SM Malls dopesters.

Wednesday, June 30, 2010

Dear John Miller,

Today, the 15th President of Republic of the Philippines will be sworn into office. He has pledged to turn around this country from the quagmire of corruption that we find ourselves in.

And we are rooting for him. Most voted for him and some did not. But now is not the time for taking sides because there are larger issues at hand. To put it very simply, the mission is to do what is right.

Bad things only beget bad things.

What does this all have to do with you? Plenty. For one, the company you represent is entrenched in our country. And two, you know that not everything is kosher. Witness to those poor SMEs that have been bullied left and right by your people. For sure you had nothing to do with it but you can definitely do something about it.

Every war has an ending. Even Afghanistan and Iraq will find a solution. It took Vietnam three decades to end a long and bloody struggle but in your case, who wants this to drag for 30 years?

It’s time. For change and to do what is right.

Friday, June 25, 2010

A new start. And no to corruption. Dear President Noynoy Aquino

Dear President Noynoy,

We voted for you on the premise of hope and battling corruption that has wrecked and stalled the growth of this country of ours. We like to think that there is still hope otherwise we would have migrated already. It’s a new administration and a new start so to borrow a line from those days when the Man Above created things, “Let there be no corruption!”

We would like to ask your help in this problem of ours. You see, small business enterprises like ours are our life’s savings or maybe even worse, our soul held hostage since we borrowed the moon and the stars to start up our own distribution business.

Unfortunately we have been bullied and cheated out of our earnings by a greedy multinational. They couldn’t care less for the little guy. The bottom line for them is their profit and earnings then damn everyone else. As if their predatory pricing and bullying tactics aren’t enough, they threaten us with removal if quotas aren’t met.

We know they waited for a Manny Villar victory because someone in his inner circle is related to someone who works at Nestle. A Villar win meant railroading our case, whitewashing it, and spitting us out.

Now it looks like that they finally want to mend fences, however not under government mediation. What are they hiding? They know that the person you’ve appointed is incorruptible and they know that paying off people isn’t going to work.

We ask that you look into unfair business practices because what does the little guy have? This isn’t a matter we can report to Raffy Tulfo. It is damn clear that the BPO industry is here to stay. For the nation’s economy to thrive there must be a healthy climate for business. They will always have their billions but never at the cost of exploiting the little guy.

We ask that you tell the Department of Trade and Industry that they should step in and investigate this. Ours is a perfect case study. If the current rules and regulations continue without amendment then it is open to further abuse of power. And you of all people should know what that means.

We hope that you heed our meek request. We believe in you and we know you can do it.



Monday, June 7, 2010

Look up in the sky. It's not a bird. It's a shark.

Nestle controls 70% of the market for powdered milk (Bear Brand), chocolate milk (Milo), and coffee (Nescafe), and non-dairy creamer (Coffeemate). Other products have a strong market share with Nestle enjoying a virtual monopoly on these markets.

For the monopoly to achieve, they organized a nationwide chain of distributors with a semi-exclusive right to distribute products in their allotted areas.

Distributors are required to sell the products at a certain price that is dictated by Nestle. They are also prohibited from adjusting the price for retailers to absorb. That means their profit margins shrink and over a period of time, they begin to absorb bigger losses.

It is logical that distributors make their profits in marked up prices to retailers. Now they are left with scraps.

Because of Nestle’s domination of the market, they can unilaterally increase prices. Instead, the multinational predator bullies its distributors and threatens them with sanctions and removal should they not hit quotas.

This is the story of FD2 and others like them.

Thursday, June 3, 2010

Who would have thought that the Nestle bird is a predator?

In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers for entry by potential new competitors. In the Philippines, or in the crap that Nestle Philippines pulls, it’s the distributors who are the victims of this nefarious practice.

Distributors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. Nestle is able to meet its quota while leaving its distributors losing money or worse borrowing money just to keep its business afloat. It’s a vicious cycle and they can hardly raise prices above what the market would otherwise bear.

In many countries predatory pricing is considered anti-competitive and is illegal under anti-trust laws. It is usually difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition. In any case, competitors may be driven out of the market before the case is ever heard.

In the short term predatory pricing through sharp discounting reduces profit margins, as would a price war and will cause profits to fall.

The only winner is that bird on the damned nest.

That is why the Department of Trade and Industry should step in. Down with these multinational buggers!

Thursday, May 20, 2010

Greed Part 1

Is it corporate culture to stiff a partner? Mohandas Gandhi once said that, "There is sufficiency in the world for man's need. Not man's greed."

In an effort to gain more sales (not that there is anything wrong with wanting to make more money), Nestle has cultivated a climate of greed and fear amongst its distributors. Don't hit the quotas and you're fired. Some partner. Poor working conditions then they sic a lawyer to get a poor distributor to sign a quit claim (under duress).

They were hoping that Manny Villar would win because a Nestle official is related to the guy who lies and swims in trash. We see an emerging pattern here. It's all about the money. Except that in this case, they played hard ball in hopes they find a favorable new administration. Too bad. Money Villar is off to Europe to lick his wounds. Oh one of the new president's nephews works for them. Mahiya naman kayo. You already went through the late President Cory Aquino who was given a slanted view of their lies now they hope they have a connection.

Except that everyone's watching. No corruption. Get with the program, Nestle. Fix your shit.

They don't want to get into mediation with DTI because it will open a can of worms about poor practices. Should have resolved this before and quietly. Now they have to pay the piper.

If they had resolved this quietly and fired the parties that compromised the distribution deal gone wrong then none of this would have blown up.

Monday, April 19, 2010

Nestle is the real Pacman

Nestle had the highest level of capital required and the lowest gross margin. That means they require heavy investments yet they have the lowest return per investment! Remember this distributor business requires return profits. It also requires a longer payback on returns. How does one make money when it’s constantly being eaten up by Nestle’s corporate greed? They require serfs not partners.

They also have the lowest trade support for promotional activities. And incredibly, they did not factor in bad debt, bad order allowance, taxes, and other costs that regularly eat into profit margins.

They are the true Pacmans.

You see! It's an international epidemic this Nestle. And their shit has gone viral.

UK: Nestlé Faces Threat Of Industrial Action
The threat of industrial action by thousands of workers at Nestlé’s operations in the UK is set to come a step closer, with union leaders expecting strong support for a strike ballot. Officials said yesterday there was a "very strong feeling" that a consultative ballot on action in protest at a pay freeze would receive huge backing.

The ballot of up to 3,000 workers at Nestlé sites across the UK would lead to a formal vote for strikes being held, raising the prospect of walkouts after the general election. Jennie Formby, national officer of Unite, said the company had blamed the state of the economy for the wage freeze, but described this as "complete nonsense". She said, "Confectionery is recession-resistant and Nestlé is doing extremely well. Its profits have increased substantially, but it is now attacking collective bargaining and exploiting its workers.

"We are clear there will be a very strong yes vote in the ballot. Nestlé is not an employer in trouble - the billions given to shareholders demonstrates they have the cash and our members deserve a pay increase."

Nestlé said in an internal bulletin that it faced "significant" challenges which showed no signs of decreasing, adding that the recession was "fundamentally changing" consumer behaviour. The company said it was not realistic for local pay negotiations this year, although it stressed it did not compromise its commitment to local pay bargaining.

The result of the consultative ballot is due by the end of the month.

Activists 'drop' in to Nestlé shareholder meeting

Banner drop inside Nestlé AGM.

Banner drop inside Nestlé AGM.

Enlarge Image

LAUSANNE, Switzerland — Thirty activist 'orang-utans' greeted shareholders as they arrived for Nestle's Annual General Meeting today asking them to give Indonesia's rainforests a break and stop profiting from destroying rainforest, threatening biodiversity and accelerating climate change.

Inside the meeting itself Greenpeace activists dropped from the ceiling and unfurled two large banners directly over the heads of shareholders. We want shareholders to use their influence to change Nestle's policies and stop using palm oil and pulp and paper products from destroyed rainforests and carbon-rich peatlands.

Since the launch of our Kit Kat campaign (March 17th), 200,000 people have sent e-mails to Nestlé and hundreds have called them. Today hundreds more are addressing them and their shareholders online - we invited Nestle shareholders to receive messages during the AGM directly from online supporters of our campaign by visiting - where they will also be able to watch the Kit Kat video that launched the campaign and has now been viewed over 1.3 million times.

Our International Head of Forests Campaigns, Pat Vendetti, made a short address directly to shareholders. He urged them to ensure that Nestle stop purchasing products from rainforest destruction. The company is not only driving climate change and biodiversity loss if it continues, but it is also damaging its corporate reputation.

Earlier in the day German activists gathered at Nestle's headquarters in Frankfurt where they erected a 'Twitter wall' displaying tweets from online supporters at Nestle employees as they arrived for work.

Following the launch of the Kit Kat campaign, Nestle publicly announced that it would cancel its direct contracts with Indonesia's biggest palm oil supplier, Sinar Mas, because it has a long history of environmental abuse. These cancellations did not really give the rainforests a break, because Nestle continues to use Sinar Mas palm oil, as well as Sinar Mas pulp and paper products, via other suppliers like Cargill and Asia Pulp and Paper (APP), a subsidiary of Sinar Mas.

Each day that Nestle allows Sinar Mas products in it's supply chain, it links itself to the rampant destruction of Indonesia's rainforests and peatlands. Today we have published new satellite and photographic evidence showing that Sinar Mas continued to destroy peatlands and other conserved areas in Indonesia despite making a commitment in February to stop. Nestle is condoning this destruction by not acting immediately to remove all Sinar Mas products from its supply chains.

Deforestation is a major cause of climate change. It is so rampant in Indonesia that the country is the world's third largest greenhouse gas emitter. To avert catastrophic climate change we must end deforestation - to begin with we need an immediate moratorium on destroying Indonesia's rainforests and carbon-rich peatlands.