Multinationals Break Vietnam Law in Formula Sales

HANOI — Multinational companies in Vietnam sell baby formula so aggressively that they routinely stretch and sometimes break laws designed to promote breastfeeding, an AP investigation has found.

International guidelines and Vietnamese law recognize breast milk as superior to formula for an infant's health. Yet dozens of interviews with mothers, doctors, health officials and shopkeepers suggest that formula companies pay doctors to peddle their products, promote it for infants under age one and approach mothers and health care workers at health facilities—all of which are against the law.

Milk cans are seen at a milk store in Hanoi. (Photo: AP)

The number of Vietnamese mothers who exclusively breast-feed in the first six months—the most crucial period—stands at just 17 percent, less than half what it was a decade ago, according to UNICEF. Meanwhile, formula sales in Vietnam jumped 39 percent in 2008, according to a study by Nielsen, a market research firm. Another survey found that the industry spent more than $10 million on advertising last year, placing it among Vietnam's top five advertisers.

The companies say they follow the law and attribute increased sales to other factors, chiefly more working women with money to spend and less time to breast-feed. Health experts agree that these factors have played a role, but also point to relentless marketing by formula companies.

The aggressive marketing of formula is common across the region, from China to Indonesia to the Philippines, according to the International Code Documentation Center, a Malaysia-based nonprofit that seeks to eliminate the irresponsible marketing of baby foods. While companies often violate the voluntary international milk code, the center says, they are usually careful to follow the letter of individual country laws.

When the Philippine government tried to tighten its advertising laws for milk products two years ago, the companies took it to court.

"The health workers there were part of the marketing arm for those products," said Jean-Marc Olive, Vietnam representative for the World Health Organization, who used to work in the Philippines.

Vietnam's struggle shows how difficult it is for developing countries to take on international companies with hefty advertising budgets and aggressive sales and legal teams.

"The companies have millions of dollars and dozens of lawyers, but the Vietnamese government has a tiny budget and just two people promoting breast-feeding," said Annelies Allain of the International Code Documentation Center.

In early August, during World Breastfeeding Week, the Vietnamese government adopted an ambitious target: a 50 percent exclusive breast-feeding rate by 2015. Health Ministry officials also announced they had uncovered dozens of violations of formula labeling rules.

But only one fine was levied—for less than $200.

Among the most serious violations that sources described separately to the AP were commissions paid to doctors to sell formula.

Workers at a women's health clinic in Dong Nai province had an exclusive deal with Dutch Lady, a brand of Friesland Foods, based in Meppel, the Netherlands, said Dr. Vo Thi Kim Loan, the clinic's former vice director.

"We got a small commission for each can," she said.

Jan Bles, the Vietnam director for Dutch Lady, denied the allegation.

"We do not compensate doctors, clinics, hospital or their staff for selling or promoting our products," he said, although he acknowledged providing furniture for the clinic, whose waiting room is adorned with a large Dutch Lady logo.

Tran Thi Hanh, the clinic director, said the clinic signed a contract to promote a Dutch Lady powdered milk product for pregnant and nursing mothers, but didn't sell products for babies or receive commissions by the can.

The clinic also printed a Dutch Lady logo on registration forms for women who came for ultrasounds or prenatal check-ups, she said. In return, Hanh said, Dutch Lady provided lunch for about 50 staffers from smaller clinics around the province who came to the bigger clinic for training every three months.

Several other big formula companies also tried to land a deal with the clinic, said Loan, the former vice director.