Part I Sleeping with the Enemy

It’s Just a Mission Statement

(or in Nestle’s own words, “ a Code of Ethics”)

Part I Sleeping with the Enemy

In the movie Jerry Maguire, actor Tom Cruise who plays the main character of the super sports agent suddenly develops a conscience with regards to the representation business of sports athletes.

Little did he know that his manifesto for more ethical business dealings would backfire on him as he is fired from the company he helped turn into a industry giant.

As his world turns upside down, Maguire in a fit of depression mutters, “It was just a mission statement.”

What is a mission statement?

It is supposed to be a formal purpose or direction of a company that is highlighted by its core values. And based on that there is the code of conduct by which all company actions and undertakings will be guided by.

And that bring us to Nestle Philippines Inc.

The Swiss-based company has products that are deemed an indispensible part of people’s everyday lives. In order to get their products and services across, they rely on a chain of distributors who are assigned certain areas of operations to supply and sell their wares.

The distributors aren’t Nestle employees. However, they report to Area Sales Managers (who are employed by Nestle) who take care of the needs of their distributors.

In this particular instance, the ASM – Elisa Lupena -- took care more than just her company’s needs.

In our journalistic quest for interesting business stories to report for a local broadsheet, we came across some public documents regarding the methodical destruction of a distributor by a bullying multinational that thinks it can get away with anything it wants. And much of the damage done to the distributor is due to collusion and an illicit and sexual relationship between an ASM and the distributor’s own President/Operations Manager.

But that’s jumping the story right into bed and this is supposed to be a wholesome story.

Somehow it is never wholesome even if it involves Nestle Philippines Inc.

FDI 2 entered into a distributorship agreement with Nestle in 2003 to sell and distribute the corporation’s production in a pre-agreed area. The multinational promised support in terms of marketing and promotions in the area. The relationship, the business was so successful that Nestle awarded FDI 2 as its Metro Manila Distributor of the Year for 2005 and 2006. That’s two years running and if ever, is a clear illustration that they were doing their jobs and complying with agreements.

However, unknown to the owners of FDI 2, one reason for their success was that Nestle’s Area Sales Manager Elisa Lupena was exerting undue pressure on its distributor to meet increasing sales targets. That meant that FDI 2 would have to buy more products from Nestle to sell. Whether this makes money or not is not Nestle’s concern. The bottom line for them is to hit their sales targets.

Lupena was able to accomplish this also through an illicit affair with FDI 2’s Operations Manager/President Mark de Vega. Although she was not an employee of FDI 2, she went overstepped her bounds by threatening the distributor’s employees with their businesses’ termination from Nestle if they did not meet sales targets. FDI 2 was forced to put in more money to save the business but were still not knowledgeable about the true problem.

This was only discovered by accident in 2007 when de Vega borrowed a mobile phone from a FDI 2’s owner and switched SIM cards. However, when de Vega returned the phone, he left some messages in the phone’s sent box.

The text messages hit the owner like a ton of bricks. And it gave some clarity into their sudden massive deficits and losses incurred in meeting the demands of Nestle.

The owners of FDI 2 brought this situation to the attention of Nestle that in turn callously brushed aside the affair as “the personal affair of two consenting adults” while disregarding the obvious conflict of interest. Furthermore, Lupena went about her duties for two more months before anything was done.

If a company hears of rumors that one of its employees was doing something wrong, isn’t it only natural that they will investigate?

And in complete and utter disregard for their client – FDI 2 – Nestle demanded that FDI resign. FDI didn’t resign, and was subsequently terminated. As part of the turnover, nestle demanded that FDI return inventory that they had already been paid for, as part of their “processes;” anyway, they would pay for it in cash immediately. And with veiled threats made against the continued existence of FDI 2’s brother company as a distributor, it was forced to agree to return PhP 11,070,773.00 representing the inventory taken back by Nestle.

Doesn’t this strike you as odd? You buy Nestle products and technically they already belong to the distributor not the company. Yet they took it back.

Our conclusion here is, Lupena’s bullying tactics are known by Nestle’s top people. You know? Nothing goes down with out their knowledge.

Again another scene in Jerry Maguire comes to mind…

“Show me the money!”

That’s the bottom line of all of this. We want your money and to the hell with your business.