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Danone offers to feed the world

By Chris Mercer , 19-Dec-2006

It is not a task for the faint-hearted, but French dairy and food group Danone has pledged to use more research and development resources to tackle malnutrition around the world.

The announcement follows early success of the firm's partnership with the Grameen bank in Bangladesh, to provide fortified yoghurt to consumers on low incomes.

Danone now plans to extend projects like this and use its "capacity for innovation" to develop "viable" solutions to malnutrition and the preservation of natural resources in more areas of the developing world.

The drive, if backed up with adequate resources, may raise the bar for multinational food firms on social responsibility.

Around 792m people suffered from one of the various forms of malnutrition in 2000, when global statistics were last compiled by the United Nations Food and Agriculture Organisation.

Danone said it would establish a Social Responsibility Committee to oversee projects. It is already expected to extend its affordable yoghurt initiative with the Grameen bank in Bangladesh.

"It will continue to expand until all malnourished children of Bangladesh are reached with this yoghurt," said Muhammad Yunus, owner of Grameen.

His comments came during an acceptance speech last week, after winning this year's Nobel Peace Prize for his innovative efforts to reduce poverty.

He called on society and businesses to put greater emphasis on reducing world poverty. "We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it."

Yunus was credited with pioneering a new business approach that is less one-dimensional in its pursuit of profits.

Danone, following his example, said it would ask its shareholders for funds to support businesses "that aim to be profitable but make social and societal goals rather than earnings their first priority".

The fund, which will first be used in Bangladesh, will be called 'Danone.communities'. Franck Riboud, Danone's chairman, said: "Our goal is to contribute, as far as we are able and as effectively as possible, to experimentation with new economic models that offer new hope and may become the models of the future."

The group's renewed ethical zeal this year has so far failed to make an impression on its position in ethical producer rankings, however.

Danone has continued to score eight out of 20, translated as "poor", in the Ethiscore database - a system created by the UK-based Ethical Consumer Research Organisation. The rating awards and deducts points according to a company's practices across several areas, including worker rights, fairtrade and environmental credentials.

Danone was also criticised earlier this year after it emerged the firm received €25m in European Union export subsidies in 2004.

Campaign groups say export subsidies help European firms to 'dump' excess products on developing countries, damaging incomes for native farmers. The EU has provisionally agreed to end the policy by 2013.

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