Swiss food giant Nestlé has been forced to soften its demand for US$6m in compensation from the Ethiopian government following a wave of public outrage and severe criticism from aid agencies.

The world’s largest coffee company was demanding payment for a livestock company the Ethiopian government seized from one of Nestlé’s subsidiaries in 1975. Nestlé was refusing to accept the $1.5m being offered by the government of Ethiopia, a country dealing with its most serious threat of famine since 1984, and was instead demanding the government pay the full $6m it believes it is owed.

International aid agencies such as Oxfam have condemned Nestlé’s demands. “This is a company that has said publicly that one of the things it wants to do in the world is to help make poor people better off. This is a company that is trying to squeeze out of one of the poorest countries in the world $6m,” Oxfam’s director of policy in the UK, Justin Forsyth, was quoted as saying by BBC Online. Nestlé made around $3.9bn in the first six months of 2002.

By late afternoon yesterday, 8,500 people had emailed the company to complain about its $6m compensation claim, the fastest response Oxfam says it has had to a campaign, reported the Guardian. In response to the public outrage created by its demands, Nestlé held an emergency meeting at its Swiss headquarters last night to assess damage to public relations.

The company has now promised to invest any money it receives from Ethiopia back into the country, but campaigners have repeated calls for Nestlé to give up on its demand. “I hope that Nestle reconsiders and realises they don’t need the money as much as Ethiopia. I hope they drop the issue altogether,” Sophia Tickell, senior policy analyst at Oxfam, was reported as saying by the Guardian website.

Nestlé, however, remained firm that it was in Ethiopia’s best interest to pay up. “It is in the Ethiopian government’s interest to reach a deal as a way to ensure continued flows of foreign direct investment in the country,” Francois Perroud, a company spokesman, was quoted by the Guardian as saying. “We are flexible about the timing and the amount but we are not flexible about the principle.”

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