This is how they set up their channel system. Except that the quotas go up every time it's cascaded down. To make things worse, it breeds a dog-eat-dog system. Instead of following protocol, the different channels circumvent it and go elsewhere where it is cheaper.
In order to compete, the regional distributors lower their prices and order higher volumes. This is done under the threat of termination and unjust quotas while costs for operations and expenses increase.
This becomes their kill zone. They don't care. The bottom line is -- hit our quotas and we don't care how you do it. For the small guy, it's his life savings. The problem here is sustainability and quotas without buffers and protection without regard for mature market conditions for loyal distributors. The set up that Nestle likes means cut-throat competition and pricing, cross border selling, and price wars. Their solution? Make the quota or we will find someone to replace you.
Pa-mission statement, mission statement pa kayo eh puro kayo sinungaling.
The aggrieved distributor chose mediation under government.
Why different? Because of bad faith by the former.
And they do not want the government involved who will now more about Nestle and their operations.
It’s unfortunate that Nestle doesn’t want to participate. Their non-participation shouldn’t stop government from pursuing because there are real issues. FDI reserves the right to file the case because of MO #69. Because mediation is voluntary they cannot compel Nestle to participate.
MO #69 gives DTI jurisdiction.
The original complaint is pursued upon investigation develop a resolution a formulation of regulatory rules. That is prospective. The reason why it is filed as a predatory pricing case with DTI is because it is linked directly to what is happening.
Predatory pricing – an act of sacrifice to control the market and recoup benefits later -- carries a penal code. The dynamics of the second case are simply Distributors absorb losses on behalf.
They are afraid that if it goes to DTI and they lose that will open the floodgates to more aggrieved distributors taking them to court or whatever. But in their greed, they chose to bully and bully some more.
For nearly two weeks, environmental activists have been using social media to wage war against Nestlé over its purchases of palm oil for use in KitKat candy bars and other products, catching the Swiss food giant off guard.
Protesters have posted a negative video on YouTube, deluged Nestlé's Facebook page and peppered Twitter with claims that Nestlé is contributing to destruction of Indonesia's rain forest, potentially exacerbating global warming and endangering orangutans. The allegations stem from Nestlé's purchases of palm-oil from an Indonesian company that Greenpeace International says has cleared rain forest to establish palm plantations.
Outside Nestlé's local offices in Jakarta last week, Greenpeace activists protest its purchases of palm oil from a firm they say destroys rain forests.
Nestlé says it had already decided to stop dealing with the firm, which supplied just 1.25% of the palm oil Nestlé used last year. It says it bought only a tiny fraction of the firm's output, so any impact was negligible, and that it is working toward buying only environmentally sustainable palm oil. (Though Nestlé makes KitKats in other markets, Hershey, which isn't involved in the battle with Greenpeace, makes the brand in the U.S.)
"We, like Greenpeace and many others, abhor destruction of the rain forests, and will not source from companies where there is verifiable evidence of environmental damage," says Nestlé spokeswoman Nina Backes.
Greenpeace, which is coordinating the protest, says Nestlé hasn't done enough, and is continuing to buy the disputed firm's oil in blended batches sold by third-party suppliers.
Nestlé says it is pressuring its providers to scrutinize their supply chains to keep that from happening, but it has had trouble making itself heard above the din. The difficulty with social media, says Ms. Backes, is "to show that we are listening, which we obviously are, while not getting involved in a shouting match."
Activist groups have long used Web sites, grass-roots email campaigns and videos to publicize their causes. But the attack on Nestlé is part of a new wave of digitally savvy protests, marketing experts say.
"This is the place where major corporations are very vulnerable," says Daniel Kessler, press officer at Greenpeace.
Indeed, some companies have already seen their images tarnished by digital media. Last year, two employees of Domino's Pizza posted a Web video of themselves blowing their noses on pizzas. The company responded within 24 hours with a statement on its Web site telling consumers it knew about the video and had found the pranksters.
The next day, J. Patrick Doyle, then the company's president and now its chief executive, made a video to apologize and say the employees had been fired and were facing criminal charges.
"We were honest. We were honest in our anger; we were honest in our approach. And I think people could sense that," says Tim McIntyre, Domino's vice president for communications. Mr. McIntyre says the company is now more vigilant in monitoring how consumers talk about its brand on social media, tries to be quicker in its response and has instituted a social-media code of conduct for employees.
For Nestlé, the trouble began March 17 when Greenpeace released a report on the company's palm-oil use. On the report's cover was an altered version of the KitKat logo, with the brand's name changed to "Killer."
The same day, Greenpeace protested outside the company's corporate headquarters in Switzerland and posted a mock KitKat commercial on the Web showing an office worker opening the candy's wrapper and snacking on a bloody orangutan finger.
Thousands of protesters swarmed onto Facebook and Twitter and shared the video across the Web. Some Facebook users replaced their profile pictures with the "Killer" logo and posted negative comments about Nestlé on its Facebook fan page. The postings continue, with many of them encouraging a boycott of Nestlé products, but the number peaked last week, according to Nielsen Co.
In the protest's first days, Nestlé asked Google's YouTube video site to remove the mock commercial, citing copyright infringement, Ms. Backes says. YouTube pulled the video, but it continued to spread on the Web.
Nestlé also told Facebook users it would delete their comments from its Facebook page if they included the altered logo. Social-media experts say that only incited the protesters. Nestlé's fan base on Facebook, now mostly protesters, swelled to more than 95,000.
Late last week, Ms. Backes says, Nestlé resumed posting information on Facebook to tell consumers about its palm-oil sourcing practices. She says it is too soon to judge whether sales of KitKats or other Nestlé products have been affected by the protests.
"Like all companies, we are learning about how best to use social media, particularly with such complex issues," Ms. Backes says. "What we take out of this is that you have to engage."
Marketing experts are split as to whether the company should simply shut down its Facebook page. Jeremiah Owyang, an analyst at Altimeter Group, a digital-media consulting firm, says that would close off all lines of communication. Ian Schafer, CEO of digital-marketing firm Deep Focus, sees it differently. "The damage has been so done, it might not be a bad idea to shut down the page and start over," Mr. Schafer says. "It is tough to turn that negativity around."
Workers who do find jobs in the Philippines find that they face another big hurdle after being hired: contractualization.
Big businesses, whether foreign or local, have long mastered the fine art of labor flexibilization in employment, assisted no end by a President and a government that is thoroughly sold out on the scheme. Based on the 2003 admission of Donald Dee, President of Employers Confederation of the Philippines(ECOP), 7 out 10 firms in the country practice contractualization. Some of the worst “contractualizers” among companies are also among the biggest, such as Eduardo “Danding” Cojuangco’s San Miguel Corporation (SMC) conglomerate (1,100 regulars out of its 26,000 total workforce); Henry Sy’s SM Shoemart (1,300 regulars of 20,000); and Manny Pangilinan’s Philippine Long Distance Telephone Company (4,100 of 10,000). Such widespread destruction of tenurial security in labor has had a profound impact on Philippine workers’ freedom to exercise their trade union and other democratic rights. Most of all, massive contactualization has greatly reduced the variable capital for wages, with the monopoly capitalists seeking ever-increasing superprofits in the face of the current world capitalist crisis of overproduction.
Through informal channels and the encouraging results of the meeting with Shahab last December 2008, the Nestle distributor got the impression that Nestle is ready, able and willing to abide by its credo and “do the right thing” based on its Core Values of Honesty, Integrity and Fairness.The renewal on 9 February 2009 for another year of the distributor contract in spite of various identified sales, marketing and operating improvement needs continued the feeling of good will and high hopes for the amicable resolution of the FDI issues.
But in a meeting last 24 February 2009, instead of allowing the Finance and Risk Management guys to meet and “re-look” at the Forensics Audit findings and conclusions, as initially agreed to, Shahab merely restated that for NPI, “FDI is a closed case.”
Instead of acknowledging that some NPI managers might have acted unfairly and unethically and kept key information from senior management, Shahab merely pointed out the distributor's mistakes. He said his key learnings from his reading of the Audit Report were: FDI did not follow procedures defined in the extensive Distributor Agreement, failed to communicate and use the appropriate forum for grievances, delegated authority to employees without “check and balance” thus allowing the fraud and mismanagement to continue. Bill Borbe added that as key learning FDI should have done their “numbers crunching” and if the numbers did not make sense, then FDI should have resisted the “pressure” from the NPI managers. After patiently waiting for several months to find an amicable resolution to the FDI issues while the distributor kept on hold other options. The tough-luck distributor felt betrayed and manipulated when Shahab said that NPI cannot do anything about FDI because the case is already in the lawyers’ hands.
The Department of Trade and Industry has stepped into the picture of anti-trust perpetuated by the bullying Nestle and FDI, its much-maligned distributor.
Nestle wants to go to court for one simple reason – the courts of Makati are in their pockets! Yes, them judges from the financial capital are all corrupt. Why else do you think they’re rich? They can all be bought out. But the thing is - the distributor has not gone to court so how can it be a legal matter?
The other option for the Swiss cheats is to wait until the government of PGMA steps down then the DTI’s current head, Peter Favila, who believes that this is a case of anti-trust, moves elsewhere.
That is not in good faith, brothers. Fuck the mission statement, Jerry Maguire. It was just a mission statement.
DTI stepped in because they believe that it is something that is dangerous – all this corporate bullying. Nestle fears this because is they pony up the damages, every wronged distributor will declare open season on the Swiss. And hey! What war have these fuckers won? That’s why they are neutral. They are faggots. They try to buy out people with their money and Hershey’s bars, And Swedish porn. Oh wrong country.
But there is one rule that does make this a perfect reason for DTI to step in – M.O. No. 69 on the Unfair Trade Practices covered by the Revised Penal Code.
Marcee Tidwell (shouting to Jerry Maguire) What do you stand for?
Dorothy Boyd: How about a little piece of integrity in this world that is so full of greed and a lack of honorability that I don't know what to tell my son! Except, "Here. Have a look at a guy who isn't yelling 'Show me the money." Did you know he's broke? He is broke and working for you for free! Broke. Broke, broke, broke. I'm sorry I'm just not as good at the insults as she is.
Marcee Tidwell: No, that was pretty good.
The problem between Nestle and FDI is the multinational:
- Imposed unreasonable quotas under constant threat of termination
- Pulled out of its products from the market in an unreasonable and non-transparent manner
- Instigated and fueled a price war
- Condons tax evasion
- deliberately delayed just claims for reimbursement. Something that is highly oppressive and is done in total and abject bad faith
Jerry Maguire: I'm still sort of moved by your "My word is stronger than oak" thing.
After FDI complained about the illicit affair of Nestle’s employee affected their business, instead of helping out, Nestle’s Boy Ceballos, the Regional Sales Manager, informed its aggrieved distributor that the company was severing ties with them.
Is this the way Nestle treats its partners who they allegedly deal with in a fair manner? Or is affair matters the more accurate term?
Jerry Maguire: I'm still sort of moved by your "My word is stronger than oak" thing.
The oak is corporate drivel. You know – people like the sound of platitudes. Makes them sound true, human, reasonable, responsible, and most especially, like real corporate bullshit.
Whenever a distributor is forced to max-out its bank credit lines, any further delay in collections of trade receivables is disastrous.
But NESTLE progressively imposes stretched sales volumes, it leaves the distributor with a choice of two evils: 1) to ignore the sales results imposed by NESTLE, and 2) to grant substantial discounts to customer.
The first option leaves to the termination of the distributorship contract while the second sinks the distributor deeper in debt.
So it is not a win situation for the distributor. Only NESTLE.
The Philippines lacks anti-trust laws to protect small businessmen. But what is an anti-trust law?
The definition of an ANTI-TRUST LAW:
Legislation enacted by the federal and various state governments to regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies, to promote competition, and to encourage the production of quality goods and services at the lowest prices, with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices.
Antitrust law seeks to make businesses compete fairly. It has had a serious effect on business practices and the organization of U.S. industry. Premised on the belief that free trade benefits the economy, businesses, and consumers alike, the law forbids several types of restraint of trade and monopolization. These fall into four main areas: agreements between competitors, contractual arrangements between sellers and buyers, the pursuit or maintenance of monopoly power, and mergers.
Why aren’t there any anti-trust laws in the Philippines?
To date, the Philippines do not have a comprehensive and developed legislation relating to anti-trust and monopoly activities. However, there are several anti-trust bills pending before the Twelfth Philippine Congress. They are as follows:
1.Senate Bill (“S.B.”) No. 175 - An Act creating the Fair Trade Commission, prescribing its powers and functions in regulating trade competition, and monopolies and for other purposes;
2.S.B. No. 1361 - An Act providing for more effective implementation of the Constitutional mandate against monopolies, combination and restraint of trade and unfair competition by redefining and strengthening existing laws, processes and structure regulating the same, and for other purposes;
3.S.B. No. 1600 - An Act prohibiting monopolies, attempt to monopolize industry or line of commerce, manipulation of prices of commodities, asset acquisition and interlocking membership in the board of directors of competing corporate bodies and price discrimination among customers, providing penalties therefore, and for other purposes;
4.House Bill (“H.B.”) 1906 - An Act declaring unfair trade practices as acts of economic sabotage. HB 1906 declares the following acts as economic sabotage and provides criminal sanctions for the same: (i) smuggling; (ii) technical smuggling; (iii) misclassification of importation; (iv) dumping, and (v) other forms of unfair trade practices.
5.H.B. No. 198 - An Act creating a special body that shall regulate and exercise authority over monopolistic practices, combination in restraint of trade and unfair competition and appropriating funds therefore; and
6.H.B. No. 2439 - An Act penalizing unfair trade practices and combinations in restraint of trade, creating the Fair Trade Commission, appropriating funds therefore, and for other purposes.
The most significant of these bills is S.B. No. 175, proposing the passage of the “Fair Trade Act” or an Act Creating the Fair Trade Commission, Prescribing Its Powers and Functions in Regulating Trade Competition and Monopolies and For Other Purposes. This bill consolidates all anti-trust laws into one law and establishes a Fair Trade Commission (“Commission”), an executive body that will enforce the Fair Trade Act. Generally, the bill seeks to prohibit monopolies and cartels and other practices which diminish, impair or prevent competition and free trade. It defines absolute monopolies, relative monopolies and trusts which may constitute prima facie violations of the law.
Anti-trust is defined as a merger, acquisition of control or any act whereby companies, partnerships, shares, equity, trusts or assets are concentrated among competitors, suppliers, customers or any other business entity. Under enumerated circumstances, the bill, if passed into law would require prior notification to the Commission before trusts are formed.
There are also laws of general application that are relevant to the regulation of anti-trust and monopoly activities.
The Philippine Constitution outlines the state policy of regulating or prohibiting monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition are to be allowed.
In relation to this policy, the Revised Penal Code of the Philippines penalizes parties entering into any contract or agreement or taking part in any conspiracy or combination in the form of a trust or otherwise, in restraint of trade or commerce, as well as penalizes those who prevent, by artificial means, free competition in the market. It also imposes penalties on parties who monopolize any merchandise or object of trade or commerce, or who combine with any other persons to monopolize said merchandise or object in order to alter the prices thereof or who spread false rumors or make use of any other artifice to restrain free competition in the market.
The Civil Code allows the recovery of damages in cases of unfair competition in agricultural, commercial or industrial enterprises. There are also other laws on unfair competition pertaining to the protection of intellectual property rights.
Consolidated Amalgamated -- In the science fiction movie Outland that starred a young Sean Connery, his character, Marshall William O’Neil, investigates illicit practices that are known to many including Consolidated Amalgamated, the corporation behind the scenes. The company is the inspiration behind our crusade to expose similar corporations that threaten our very livelihood.
Why we fight the good fight.
Small and medium scale enterprises are the lifeblood of many corporations both local and multi-national. These SMEs distribute goods and services in various locales and also serve as the eyes, ears, and mouth for these corporations as they know the pulse of the consumers. In an ideal world, it’s a harmonious situation. But unknown to the general public, many of these distributors are at the mercy of these giants with their multi-layered and deceptive practices that choke the precious money and even the lives of these people many who plunk in their life’s savings into the business. These corporations are oppressive bullies who are anti-Filipino and anti-SME. These are true and current stories. You can even verify them. We dare you. You have been warned.
