Dividends

End of a Boycott

It was a strangely ideological protest that seemed to array impoverished Third World mothers and their babies against a multinational corporation. It went on for 6 1/2 years, but last week it ended. Officials of Nestle, the biggest supplier of infant formula, and the Infant Formula Action Coalition of Minneapolis, among others, agreed that the boycott of Nestle products would be stopped if the Swiss company changed its marketing practices.

The boycotters complained that Nestle's aggressive marketing of the formula contributed to poor health in less-developed nations by encouraging mothers to give up breast feeding. Illiteracy, plus lack of refrigeration and clean water, the protesters charged, caused widespread misuse of the products and resulted in poor diets and illness.

Nestle says its sales were never measurably hurt by the boycott, which was well organized in ten countries. When the World Health Organization set guidelines for the marketing of formula in 1981, Nestle endorsed them.

The beginning of the end for the protest came in December during a chance meeting between Niels Christiansen, Nestle's director of research, and Douglas Johnson, head of the principal boycott group, on a Philadelphia-New York train. They concluded that their differences were slight. In the final agreement, Nestle promised to promote breast feeding as superior to formula and to warn of the hazards of misuse on graphic labels that can be understood by people who cannot read.

Coors vs. Coir's

When Robert Corr of Chicago began making natural-flavor sodas in 1978, he decided that his family name would have a familiar ring to Windy City buyers. His great-uncle Frank was a mayor of Chicago in the 1930s and founder of a football team called the Corr Flashes. But by putting the trademark Corr's on bottles and cans, the soda maker uncapped the rivalry of another proud name: Coors.

The Golden, Colo., brewer showed little concern about the sound-alike name until last year, when Corr's started showing up in grocery stores in 50 states. The beer company sued in a Denver federal court, demanding that Corr's change its name. Coors claimed that the tiny soda maker was trying to trade on the brewer's identity. As evidence, it cited one of Corr's slogans, "Made with pure Rocky Mountain water," which barely differs from the beer company's famous motto.

When the two sides met in court last week, Judge Sherman Finesilver asked them to try to work it out themselves. But the talks may resemble a family feud. Said Corr: "This is a basic principle, and I'm prepared to fight for it."

Expensive Divorce

The breakup of American Telephone & Telegraph into eight pieces on Jan. 1 was more than history's largest divestiture. It was also the most expensive: AT&T calculates that it cost $1.23 billion. That includes the salaries of 10,000 people involved in the breakup, the cost of new letterheads, signs and trucks, and advertising to get the word out. Last week the bill showed up in the company's earnings report for the fourth quarter of 1983, the last for the Bell System as an entity.

So did an even bigger cost: $5.5 billion, mostly for write-offs on aging telephone equipment that was returned to A T & T by the old Bell operating companies. As a result, AT&T had a quarterly loss of $4.9 billion, the biggest ever for a U.S. corporation. Bethlehem Steel had the former record: it lost $1.15 billion in three months during 1982.

AT&T Chairman Charles Brown said investors need not worry: "The results are not predictive of future earnings performance of AT&T and the Bell companies." Analysts noted, however, that AT&T's income from operations before the write-off was down 17.8% from the 1982 total, disappointing for a year in which economic recovery should have shown up more on A T & T's bottom line.