Shared value is a term coined by Nestlé’s marketing department to describe growth based on socially responsible practices that contemplate the need to protect the environmental and the best interest of everyone involved, including consumers, workers and producers, and of course shareholders. In Chile, like in other parts of the world, things are very different in reality.

Nestlé began operating in the Chilean market in 1934, branching more specifically into the dairy sector over 70 years ago. Today it is one of the leading companies in the country, with seven productive centers distributed nationwide, and marketing a range of brands, including Nido, Savory, Maggi and Nescafé.

At its Macul Industrial Complex, where it produces yoghurt and custards, it has a workforce of 1,200 operators, more than half of whom are represented by one of three unions: 450 in the Fourth Union, 80 in the Sales Division Union, and 270 in the First Union that represents ice-cream division workers.

The Fourth Union began negotiations for the new collective bargaining agreement on May 16 with the presentation of the list of demands for the 2011-2013 period.

Among the list of demands, workers are asking for wage parity for 300 of the 450 union members, considering that they earn under US$ 400 a month, while the rest earn approximately US$ 600.

They are also asking for a wage increase of 10 percent for the first year and 7 percent for the  second year, on top of the corresponding Consumer Price Index (CPI) for each year. Moreover they demand an End of Negotiation Bonus¹ equivalent to 1,000,000 Chilean pesos (around US$ 2,000).

On May 26, upon expiration of the term established by law for the direct dealings stage, the company responded to the list of demands with an unacceptable counteroffer.

One of the most critical points of this counteroffer is that it excludes 80 workers from any agreement reached in these negotiations, as management claims these workers are covered by an agreement previously signed with a negotiating committee. This argument is groundless and violates clear principles contained in the main ILO conventions ratified by  Chile.

With respect to wages, the company offers a ludicrously low increase of only 3.5 percent distributed over the next three years –with no increase on the fourth year–, on top the CPI for each year. The proposed raise was not satisfactory for the union, who is also firm in its stance that the agreement should only be valid for two years.

After a number of meetings, the exclusion of the 80 workers was resolved, but the company started to drag out discussion on key issues, knowing that by law the parties had until June 30 to reach an agreement. In view of this situation, the union was forced to adopt actions to pressure the company.

On June 20, workers staged 15-minute work stoppages by shift. That same day, the union contacted the Labor Ministry, considering that, given the company’s response, a union assembly would have to be called on June 29 to vote on the strike.

On June 28, at lunchtime, the workers protested by banging their spoons on the cafeteria tables, a measure that had a huge impact on management.

On the day of the assembly, the workers voted and the strike was approved by a wide margin. If the company now decides to resort to what under Chilean law is called “good offices” (mediation), the parties have until July 6 to reach an agreement, or the union will launch the strike.