Ethiopia versus Nestle

Louis Proyect lnp3 at
Thu Dec 19 08:53:22 MST 2002

Ethiopia faces critical food shortages

The Swiss-based food giant, Nestle, has defended its demand for $6m in
compensation from famine-stricken Ethiopia. The dispute with the
Ethiopian Government centres on a livestock firm that was owned by
Germany's Schweisfurth Group, a Nestle subsidiary, before being
nationalised by the former communist regime in 1975. Nestle has been
offered $1.5 m so far

"I think it goes way beyond the legal case," a Nestle spokesman told the

"I think it is in the interest of the developing countries in general to
have a continued flow of foreign direct investment."

He said it was "very important for a country like Ethiopia that people
do not fear to invest in that country".

More than 40 governments and individuals are making claims against the
Ethiopian Government for money lost during the communist regime.

According to poverty relief organisation Oxfam, the Ethiopian Government
has offered to pay Nestle about $1.5m (£930,000) - a figure based on the
current exchange rate between the dollar and the Ethiopian birr.

But the food giant is pushing for a payment of $6m, a sum based on the
exchange rate in force at the time of the nationalisation.


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