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Unilever
Corporate
Crimes
1. Promoting
consumerism
2. Misleading marketing
3. Market domination
4. Procter&Gamble and Unilever reach agreement
5. Pushing the neoliberal agenda and spreading
false information
6. Exploiting -relatively cheap- resources
in the Third World
7. Promoting unsustainable agriculture
8. Environmental pollution
9. Using consumerism to ‘eradicate’
poverty
10. Taking public space/barring imagination
11. Collaboration with oppressive regimes
12.
Hypocritical Health Campaign induced by
Self-Interest
13.
Excessive Pay Management
1. Promoting consumerism
Unilever spends a lot of energy and money on marketing and commercialisation
of consumer products all over the world (‘Paint the World Yellow’
– the Lipton marketing campaign which provide everything with
the Lipton Logo, from surfboards to Chevrolets—was a tremendous
success, according to Unilever. It created a much bigger Lipton Logo
awareness amongst consumers.) Since the Northern consumer market is
saturated (so not much room left for expansion of market shares) Unilever
aims at maximising the processing of food, which means adding value
to ‘improve’ products and then charge more for these products.
Unilever changes the product only slightly (e.g. strawberry toothpaste),
or just changes the visual language in order to sell exactly the same
product. Naturally this process involves heavy advertising. Many of
the ‘improved’ products are basically useless, and there
is no demand for them (the demand is being manufactured by the multinationals
themselves). In short, Unilever tries to bring as many products as
possible to the market without asking itself the question ‘is
there a real need for the products we produce?’
Since the majority of people in the South still go hungry every day,
there is much more room for growth in these countries. If the income
of the poor rises, there is a big change they will spend the money
on food products. Unilever is in a unique position to exploit this.
They have expanded market share in the South, and in Central and Eastern
Europe through heavy advertising and the introduction of new products.
Products ‘from the west’ (like cigarettes, watches) are
often very popular in the South, because of their supposed ‘high
quality’ and because they can be associated with luxurious, western
lifestyles (see also the paragraphs on ‘using consumerism to
eradicate poverty’).
Flooding the world with ever more (useless) products is a pretty immoral
sales strategy. Only think of the ecological costs that come along
with it (processing of products, packaging, waste processing, transport,
etc. all involve high ecological costs). If people in the South start
consuming the same amount of products and services as people in the
North, the natural environment will definitely not survive. The only
real and sustainable solution to environmental problems is less production
and less consumption. Unilever and other multinationals are main actors
being responsible for the ongoing trend in the opposite direction!!
Besides, heavy advertising generates psychological effects like feelings
of inadequacy, disorientation, mood disorders, and cynicism.
In effect, advertising involves tremendous non-value added costs,
in other words, a tremendous waste of resources.
2. Misleading marketing
Rebranding the same or slightly changed products for sale can
legitimately be labeled misleading, likewise the introduction of new
products that supposedly improve the daily lives of consumers (‘you
will feel better starting the day with…’) or strengthen
their self-image (‘you are worth it, aren’t you?’).
The UK Advertising Standards Authority (ASA) has recently accused
Unilever for false advertising. The ASA ruled that Unilever misled
British consumers in the way the company presented the health benefits
of its cholesterol-lowering margarine, Flora pro-activ. According
to ASA, Unilever’s Van den Bergh Foods unit overstated the benefits
of Flora pro-activ in one press advert that claimed it could reduce
LDL cholesterol by 10 to 15 percent. After the ASA ruling, Unilever
agreed to make the required changes and not advertise in the same
way again [54].
(Sanctions against advertisers who break codes of practice in Britain
are ineffective. The ASA has no statutory powers. It can report persistent
offenders to the Office of Fair Trading, but it is reluctant to use
this deterrent (Monbiot, 2001)
3. Market domination
Multinational corporations evidently have tremendous market power.
They can decide what products are to be manufactured, what crops are
to be grown, and above all, they can dictate prices. Local businesses
and jobs are destroyed along the way, because that is the law of the
jungle. For example, take tea. Unilever is the world’s largest
tea company, and owns 18,000 hectares of plantations in Kenya, Tanzania
and India. It controls 20% of the market (most likely these 1999 figures
have changed), through its ownership of the Brands Lipton’s and
Brooke Bonds. Consequently, it has major power over the tea price.
In the mid 80’s, when the Indian tea price started to rise, Unilever
and other corporations acted to bring it down by temporarily boycotting
Indian tea. When the Indian government tried to set a minimum export
price, the multinationals collectively withdrew from the market, forcing
the government to retreat, and slash the price.
Corporate Control of
Agriculture -the case of the Netherlands-
Two or three suppliers are controlling nearly all sectors
in agriculture. Take for example the dairy sector, which
is being dominated by Friesland Coberco and Campina Melkunie.
Or take the pig sector, which is being controlled by Numico
and Dumeco. These companies supply the farmers with the
animals (in this case, the pigs) provide the animal feed,
and finally, they slaughter and process the pigs –
in the meantime the farmer temporarily looks after them.
The arable sector is structured along the same lines. Potatoes,
cauliflower, onions, carrots: two, at most three, companies
supply the seeds and bring the crops to the retailers. Two
big supermarket chains –Ahold and Laurus, are controlling
the retail business. However, food corporation Unilever
is positioned at the top of the pyramid.
Reference: Volkskrant Magazine, 16.06.2001
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4. Procter&Gamble and Unilever reach agreement
While creating the image of tough competition, big corporations
often cooperate in order to divide markets among themselves. Unilever
and Procter&Gamble (P&G) have recently (6 September 2001) reached
an agreement to settle all issues related to disclosure of competitive
business information. Terms of the agreement were not disclosed (how
surprising!). P&G chairman John E. Pepper said, ‘We believe
the agreement protects both P&G’s and Unilever’s business
interests.’ (what about the consumers’ interests?) Pepper
continues: ‘This agreement (…) will not inhibit fair and vigorous
competition in the marketplace’ [55].
(with multinational corporations dominating the marketplace in many,
if not all sectors of the economy, one cannot speak of ‘fair competition’).
5. Pushing the neoliberal agenda and spreading false information
Like all big multinationals, Unilever is a major advocate of economic
liberalisation and privatisation; processes that will enable multinationals
to take ever more advantage of business opportunities worldwide.
Recently, at a meeting of the Economic Club of Washington DC, Unilever
chairman Niall FitzGerald called upon his fellow CEOs to draw together
in support of a new round of global trade negotiations. Since the WTO
debacle in Seattle (September 1999), official trade negotiations have
held back.
FitzGerald describes the growing resistance against the WTO and ‘free-trade’
as an ‘emotional backlash of passionate naysayers against globalisation’,
ignoring the strong resistance and fact-based/sound arguments coming
from many developing countries, NGOs, activist groups, scientists and
well-informed people in general. FitzGerald acknowledges that these
people have ‘legitimate concerns’, but he thinks providing
these people with the right information will take their concerns away.
The bottom line is, according to FitzGerald, that ‘free-trade’
will benefit all, including ‘the billions of people struggling
to improve their lives’. FitzGerald is eager to get a new trade
round going –and make it a success, so that ‘we can ensure
that increased global prosperity benefits all of us, and contributes
to the opportunity for billion of ordinary people to live with dignity
and aspire to their highest goals [56].
6.
Exploiting -relatively cheap- resources in the Third World
‘International by design, we have deep roots in many countries.
By the very nature of our business we are an integral part of the societies
in which we operate. Local companies are predominately run by local
people in tune with their communities and who understand their needs
and values - a truly multi-local multinational.’
Unilever Statement
Unilever has strong ties to the Third World thanks to the operation
of plantations and the agricultural experiments it has carried out
on the behest of, or in co-operation with, national governments.
Unilever’s Third World operations often have higher profit
margins than its European and North American operations, not surprisingly
of course, since capital-rich multinationals can easily enforce
access to cheap raw materials, land and low-paid workers in the
South. Many of Unilever’s consumer products originate in the
South, e.g. tea (see paragraph on market domination). Multinational
corporations usually take the major part of the profit-cake, and
leave the crumbs for the small producers/farmers in the Third World.
It is of course the latter that are providing the real core value
of a product (although in this age of commercialisation and commodification
off all things, including ideas and images, brands are increasingly
being considered as the core value of a product).
Again, let’s take tea as an example (see also the paragraphs
on ‘market domination’). Almost all tea is grown on plantations,
where workers (mainly women) are dependent on the plantation for
jobs and completely powerless to improve their situation. Wages
are generally extremely low and living conditions appalling. Meanwhile
companies, like Unilever, which do the blending, packaging and marketing
of the tea (in the consumer countries) cream off 30-50% of the retail
price. It’s obviously very convenient for Unilever to be involved
in the entire process that results in a consumer product, in other
words, to vertically control the food chain. Unilever and other
food corporations control virtually every step of the food production
and distribution system, at the cost of food security and agricultural
diversity in various countries. Multinationals like Unilever direct
and shape agricultural and economic systems to their own profit
driven needs (see paragraphs on unsustainable agriculture).
Africa
The Unilever companies originally moved into overseas territories
for two reasons: They wanted to sell their products everywhere and
they wanted to secure raw material bases. However, once a unit was
established somewhere, it tended to be interested in all manner
of businesses. A prime example was the fabled United Africa Company
(UAC), which William Hesketh Lever began building in 1910 when he
bought W. B. Maclver, a Liverpool trading company operating in Nigeria.
In the next nineteen years trading company after trading company
in West Africa fell into the hands of Lever Brothers, culminating
on March 3, 1929, nine months before the merger with the Margarine
Union, in the amalgamation of the Lever-controlled Niger Company
with the African and Eastern Trade Corporation. The formation of
the new Lever subsidiary, United Africa Company, was announced from
the Savoy Hotel in London. Subsumed in UAC were activities of more
than a dozen trading companies, most of them of British origin,
one of whose histories went back three hundred years to its days
as a slave trader.
UAC was basically a merchant business that acted as a wholesaler,
retailer, manufacturer, exporter, importer, banker. You name it,
and UAC did it. The company's basic role was to export the crops
of African farmers and import manufactured goods from Europe. When
UAC was formed, it controlled 60 percent of the exports of palm
oil, 45 percent of palm kernel, 60 percent of peanuts, and 50 percent
of cocoa from the four British colonies of West Africa -Nigeria,
Gold Coast (now Ghana), Gambia, and Sierra Leone. In addition, UAC
had extensive operations in other African countries, including the
Belgian Congo, Cameroon, and the Ivory Coast. In all, it had one
thousand locations on the African continent. For the next twenty
years, from 1929 to 1949, Unilever's UAC was unquestionably the
largest and most important company operating on the African continent.
Nor was its contribution to Unilever insignificant. In the years
immediately following World War II, UAC accounted for one fifth
of Unilever's turnover and, if the contribution of the plantations
was added, between one third to one half of the profits.
Independence movements swept Britain, France, Belgium, and Portugal
out of Africa in the post-World War II years but not Unilever. As
nationalist consciousness grew in Africa, criticism of the company
focused on both UAC’s dominant position in domestic African
economies and on its rate of profit and the easy remittance of those
profits overseas to its Anglo-Dutch parent. Gradually, African governments/commercial
classes took bigger stakes in UAC. Unilever found its companies
nationalized in more than a dozen countries ['This nationalization,'
the company once noted, 'may be with full compensation, as in Iraq;
with deferred compensation, as in Burma; or with partial, differed
compensation, as in Egypt; or anything in between.'] Its role has
changed. It no longer controls the marketing of West African crops.
And it has been forced to sell manufacturing units to governments,
including a majority interest in its biggest subsidiary, United
Africa Company of Nigeria. In 1973, to adjust to these changing
political conditions, Unilever changed the name of United Africa
Company to UAC International and changed its charter as well. If
it had its way, Unilever would own 100 percent of its overseas subsidiaries.
But as a seasoned sailor in international waters, it knows how and
when to tack to the winds of change [57].
To conclude, UAC played a key role in developing commodity-based,
export economies which many African countries are grappling with
today and Unilever, whatever name it uses, remains positioned to
direct and shape the markets to its own advantage (see for a full
story on Unilever and UAC: Multinational Monitor, issue 9, 1998).
Central and Eastern Europe (CEE)
Unilever and Procter & Gamble are western companies that
have profited from the collapse of Central and Eastern European
communist regimes and the consequent opening-up of their economies.
The food corporations took advantage of the unequal playing field
in Europe. They have basically divided the CEE market for personal
care products between them, shutting down national companies in
the process. Central and Eastern Europe provide multinationals with
an enormous supply high-skilled, low-wage workers and some 150 million
consumers. In ERT Secretary-General Richardson’s view: ‘It
is as we have discovered a new South-east Asia on our doorstep.’
Multinationals are eager to incorporate CEE into the EU and see
the EU enlargement become a fact. They see this as a win-win situation
for both Eastern and Western Europe. However, dependency on foreign
investments has already had negative impacts on employment and environment
in CEE societies [58].
In Hungary, for instance, multinationals currently account for up
to 30% of GDP. Local companies throughout the region struggle –often
unsuccessfully- to compete with large corporations, which benefit
from enormous advantage of scale, access to cheaper capital, superior
technology and massive advertising budgets. That multinationals
are able to produce greater quantities at less expense and with
fewer employees gives them a distinct advantage, but creates the
legacy of increased unemployment [59].
By 1992, significant sectors of the Hungarian economy, including
brewing, cement, glass, bread, vegetable oil, sugar confectionery,
paper and refrigerators were in the hands of foreign multinational
corporations. In 1991, nine of the largest ten privatisations went
to Western multinational corporations. Eighty-five percent of privatization
proceeds came from foreign investors. Multinationals including Electrolux,
Unilever, and General Electric have plucked attractive state enterprises
[60].
7. Promoting unsustainable agriculture
Corporations control virtually every step of the food production
and distribution system, which is riddled with ecologically unsustainable
practices. E.g., just 20 chemical companies account for the sales
of over 90 percent of all the world’s pesticides. These agricultural
chemicals are responsible for tens of thousands of deaths, and at
least a million more farm worker poisonings every year. Global giants
such as Phillip Morris, United Fruit, Pepsico, Cargill, Unilever and
Nestle oversee vast portions of international agricultural production
and trade. In fact, multinationals either directly or indirectly command
80 percent of the land around the world that is cultivated for export
crops such as bananas, tobacco and cotton. Such agro-export "development"
patterns regularly displace farmers producing food for local consumption,
pushing them into situations where they must overexploit the environment
to survive.
Unilever claims to be ‘among the world’s largest users of
agricultural raw materials, such as tea, vegetables and vegetable
oils.’ It thus has a huge impact on the shaping of global agriculture.
Unilever claims to be open to different alternatives (’all agricultural
systems have something to offer and we want to find out what works
best under differing circumstances’), but the company believes
it is the market mechanisms that will decide what system works best.
‘Our belief is that market mechanisms stimulate performance improvement
and efficiency along the supply chain and raise quality standards
to meet consumer needs and expectations.’
‘Ultimately, we want the market to work for sustainable development
and to encourage fully sustainable agricultural systems’, says
Jeroen Bordewijk, Chairman Unilever Sustainable Agriculture Steering
Group. Why do you think Unilever considers sustainable agriculture
so important? ‘Because’, as the company claims, ‘we
have a clear obligation to our shareholders and consumers to ensure
that we continue to have access to supplies of natural raw materials’.
High-input, industrial agriculture is the way forward. In its publication
on sustainable agriculture Unilever sums up the blessings of the Green
Revolution. It mentions briefly that the success of the Green Revolution
came at a cost (but let’s not elaborate on that, is what Unilever
probably thought), but plays them down immediately (‘such costs
are not new in the history of agriculture’). ‘Many leading
experts and institutions still argue strongly in favour of the high-input
method that characterized the green revolution’ [61].
But of course no mentioning of the many experts who claim small-scale
agriculture is much more productive and sustainable. Large-scale,
industrialized, high-input agriculture fits in nicely in the corporate
project of increasing corporate control of agriculture.
Chemical giants such as Shell, Monsanto, Mitsubishi and Sandoz now
control many of the world’s genetic seed stocks (through patents),
as well as much of the agricultural biotech industry – which
presents a new series of potential environmental problems, and undermines
subsistence farming. Unilever strongly supports the use of biotechnology
in agriculture (see section three above). Biotechnology is used as
a tool to create uniform, standardized crops convenient for industrial
processing, or crops with a long shelf life. Unilever tried to create
genetically uniform palm trees through tissue culture. The company
wanted to expand its palm oil operations (palm trees are grown for
the oil in their seeds; the seeds are used for snack foods and industrial
lubricants), but the trees were too variable in size to be industrialized.
Unilever created large plantations of genetically identical palms
-and bought out small farmers, cut down tropical rainforests and displaced
indigenous people in the process. Also, processing factories for palm
oil caused severe water pollution.
Unilever started using GMOs in its food products in a very early stage,
even before proper regulation (e.g. on labeling) got off the ground,
let alone a public debate (proper regulation is still not in place).
Unilever took a leading role in the promotion of genetically engineered
food (Unilever introduced ‘Bachelors Beanfeast’ into the
UK, one of the first food products containing GMOs). After the quick
introduction of GMOs in its foodstuffs, Unilever could claim there
was no turning back. It would be impossible to separate GMOs from
GM-free organisms. Zoe Elford of the Genetic Engineering Network once
(1998) put it like this: ‘Unilever is basically forcing genefoods
down consumer’s throats. The company knows most people cannot
stomach the idea of genefoods. Unilever is willfully abusing its customer
brand loyalty.’ However, as consumer resistance mounted up, Unilever
miraculously seemed to be able to produce GM-free foodstuffs. The
company takes a country to country position on the subject of GMOs
(adjusting its strategy to GM sensitivities in local markets). Unilever
recently declared it was moving to a new system in Europe where ‘hardly
any GMO ingredients will be used’. This statement clearly is
very vague, and leaves much room for continuous use of GMOs.
8. Environmental pollution
Unilever claims to be concerned for the safety of its operations
and the environment but this attitude clearly does not stretch to
India. Unilever has recently been accused by Greenpeace of double
standards and shameful negligence for allowing its Indian subsidiary,
Hindustan Lever, to dump several tonnes of highly toxic mercury waste
in the densely populated tourist resort of Kodaikanal and the surrounding
protected nature reserve of Pambar Shola, in Tamilnadu, Southern India.
Greenpeace activists and concerned residents cordoned off a contaminated
dump site in the centre of Kodaikanal to protect people from the mercury
wastes that have been recklessly discarded in open or torn sacks by
Hindustan Lever which manufactures mercury thermometers for export,
mainly to the United States. According to Hindustan Lever, from there,
the thermometers are sold to Germany, UK, Spain, USA, Australia and
Canada. The factory, set up in 1977, was a second-hand plant imported
from the United States, after the US factory was shutdown for ‘unknown
reasons’.
Unilever states that its policy is to "exercise the same concern
for the environment wherever (it) operate(s)", "ensure the
safety of its products and operations for the environment" and
"provide whatever information and advice is necessary on the
safe use and disposal of (its) products". Yet workers at the
Indian factory are offered no protection from the mercury spills and
several workers have complained of health problems which, they allege,
is caused by their exposure to mercury in the workplace. Mercury is
highly poisonous and exposure to even the small amount through air,
water or skin, exerts severe effects on the central nervous system
(brain) and kidneys. Foetuses and young children are particularly
vulnerable to poisoning by mercury [62].
Not wanting to play down the various violations of environmental acts
by Unilever’s subsidiaries, the promotion of consumerism (and
excessive use of packaging materials, transportation of products worldwide,
etc.) should be ranked highest on the company’s environmental
criminal record. Taking the ecologically destructive effects of consumerism
–aggressively promoted by multinationals like Unilever- into
account, all efforts of these companies to ‘save the environment’
can only be regarded as greenwash practices.
9. Using consumerism to ‘eradicate’
poverty
By some this is perceived as a good thing and the only way out
of misery for poor people. The UN has sent a message to global corporations,
urging them to recognise the potential of the world’s poor as
consumers. The Financial Times reports (30 April 2001) that Unilever
is one of the few companies that have already taken the initiative,
reformulating some of its products to make them accessible and affordable
to poor in India. Detergent (e.g. Omo) and shampoo, for example, are
now available in small sachets that sell for as little as half a rupee
in India (speaking of excessive packaging!). This apparently made
good quality products available to the poor, but begs the question
‘why aren’t local businesses able to provide consumers with
products?’
10. Taking public space/barring imagination
‘We are proud of our project of voluntary activities for
the benefit of society. Worldwide Unilever companies have donated
more than 50 million euro* on voluntary activities. In co-operation
with others we support projects that improve health care, rise levels
of education, and stimulate local economic and cultural activities.’
(Unilever Statement) [63].
• Incidentally this amounts to less than 0,1% of total turnover
Multinationals are increasingly penetrating the lives of people by
taking public space, first of all by advertisements. Unilever does
not perceive this as a problem at all and proudly states: ‘On
the way to work, in town or at home, consumers come across advertisements
for our brands in all areas of their daily lives – on television,
radio and the internet, in print, posters and direct mail and through
sponsorship and public relations campaigns.’
Unilever also bombard us through sponsorship and the interference
with education and science (partnerships between universities and
the private sector are mushrooming). Sponsoring sport events and art
projects seems to be among the latest trends, though art should energize
people’s imagination and should be free from commercial interests.
Unilever does not see contradiction in the mix of art and business
interests, because it is good for a company to be ‘associated
with creativity’ (in the words of FitzGerald) and to enlarge
its visibility in the public domain.
Around the world, Unilever companies invest some £25 million
in community involvement projects, including education and arts sponsorship.
On May 13th, 1999, Unilever chairman Niall FitzGerald announced a
£1.25 million sponsorship agreement with the new Tate Gallery
of Modern Art in London. The funds would enable the gallery, which
opened in May 2000, to commission and exhibit large-scale work (known
as the Unilever Series) each year for the coming five years. It was
the first major sponsorship of the new gallery's programme. (Unilever
is committing £250,000 a year until 2004 to enable the Tate
to commission new works of art.)
At the end of the summer (2000), Unilever claims enthusiastically,
two thousand people from Europe headed off for Ibiza (!) where Unilever
organized a big dance party (in a converted zoo) in order to introduce
a new product (a new variant of Axe personal care) [64].
11. Collaboration with oppressive regimes
Margarine Unie brought major interests in Nazi Germany. One source
remarked that Adolf Hitler "had decided to leave the management
of tropical colonies and enterprises (after his presumed victory)
to the Dutch, who, he said,… 'would do it better than we could
hope to'. What had evoked his respect? "The incredible efficiency
of one firm…"
More recently, Unilever was one of the companies which successfully
lobbied the European Commission to begin legal proceedings at the
World Trade Organisation to challenge US state Massachusetts’
refusal to award public contracts to companies that do business with
or in Burma (on grounds of Burma’s appalling human rights record)
[65].
Unilever grilled on bribery, human rights and environmental practice
by BBC (21 August 2001)
Unilever CEO FitzGerald has admitted that local management in some
of the 90 countries where the company operates accept "sweeteners"
or "facilitating payments" to seal business deals [66].
12.
Hypocritical Health Campaign induced by Self-Interest
In an effort to avoid tobacco-style lawsuits, food giants including
Unilever, Procter & Gamble and Heinz are to use internet, TV and
press ads to warn consumers that eating too much fast food will make
them fat. Food companies are worried if the problem continues they
could face the threat of similar lawsuits to those being brought against
tobacco firms. There is also concern governments may try to crack
down on fast food advertising or impose mandatory health warnings.
Other companies involved are Kraft Foods, one of America's biggest
makers of snack foods, Pepsi, Monsanto, Coca-Cola and McDonalds. All
companies at the forefront of promoting unhealthy food worldwide [ready-made
microwave meals (instead of fresh, whole foods), genetically engineered
crops (as opposed to organic crops), etc.] and in the process shaping
agriculture to suit industrial needs (as opposed to the needs of farmers,
local communities, the environment, or consumers).
13.
Excessive Pay Management
Unilever is likely to end the year 2002 with one of the highest paid
boards of any company in the index of Britain's 100 largest companies,
with six of its top executives being paid more than £1m in 2001.
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