Nestlé in Milk Payment Row.doc

Nestlé in Milk Payment Row Swiss food giant Nestlé, which has been busy with mergers and acquisitions in China, was suddenly reported to have united with the local government to monopolize the milk source and lower the price of crude milk in Shuangcheng, Heilongjiang. On October 25, local people who are familiar with Nestlé said that “it is no longer a secret that Nestlé reduces milk farmers? payment that they deserve. The company only pays local milk farmers for 80% to 90% of the crude milk they sell to the milk collection stations in Shuangcheng”. These milk collection stations are run by workers of Nestlé or temporary employees recruited by this Swiss company. That means the milk farmers? pay was actually skimped by Nestlé. Apart from that, the price at which Nestlé acquires crude milk in Shuangcheng is lower than the price of other milk processing companies. The present price Nestlé offers is about 2.8 yuan per kilogram while the other companies? prices reach 3 yuan or even 3.6 yuan per kilogram. This made Nestlé?s milk powder section meet an unprecedented crisis in China. The problems, such as monopolizing the milk source, skimping milk farmers? pay and buying crude milk at a low price, all placed Nestlé?s milk collection pattern of “company + milk farmers”, which Nestlé used to be proud of, under close scrutiny and heavy criticism by the public. Low Price for Long “Nestlé lowers the price of crude milk very much, forcing local milk farmers to sell their milk to the private milk collection stations in the surrounding areas of Harbin,” said a person who runs a milk collection station of Nestlé in Harbin, Heilongjiang. According to him, the price Nestlé offers to local milk farmers is 3.1 yuan per kilogram of crude milk, lower than the price offered by other milk processing companies. A director of a local milk processing company said: “The price Nestlé offers to local farmers is 3.1 yuan per kilogram, but this company always pays for only 80%-9