RESPONSIBLE MARKETING DECLARATION - INDONESIA

CONTEXT

Food & beverage companies need to connect to the consumer in order to make their brands known and liked, to make their products distinguished and preferred over their competitors, and finally to build trust and loyalty. This direct connection to the consumer gives the power to exert an influence on consumers’ choices, and at Danone we believe that with this power comes the responsibility to support consumers in making healthier choices.

Being focused on healthy categories (90% sales volume for overall Danone in 2019 are in healthy categories), our marketing spending is mostly focused on healthy products, but nevertheless we have adopted a set of rules to guarantee that our marketing efforts and resources are indeed focused on driving healthier choices.

This Declaration aims at clarifying how the general Commitments made by Danone regarding responsible marketing translate in Indonesia.

D This Declaration states Danone’s commitment, globally as well as locally in Indonesia to comply with local regulations and code of ethics issued by acknowledged industry association, both global and local in which Danone is a member, concerning responsible marketing practices for general consumers as well as specific consumers, such as parents, pregnant woman, caregiver, etc. In addition, Danone in Indonesia commits to comply with relevant pledges and policies concerning responsible marketing practices issued by Danone Group at global level.

We commit that all our communication is based on legitimate facts and scientific justification, truthful and always putting consumers’ best interest at heart. We believe that by implementing responsible marketing we can help consumers in making healthier choices and hence, help to improve the wellbeing of the consumers.

1) General principles at Danone level

Every subsidiary in Danone complies to the general commitments made by Danone regarding responsible marketing :

• Danone is committed to follow the ICC Code.
• Regarding more specifically Responsible Marketing to Children (below 12 years), Danone has published a company Pledge, last updated in December 2019 . This especially applies to Essential Dairy and Plant-Based and Waters Divisions. This Pledge defines the general rules applicable in Danone regarding the marketing targeted at children, which are conditioned by the marketing channels used and the nutritional profile of the product.
• Regarding the Marketing of Formula intended for Infants5, Danone has published a company Policy, last updated in 2018. This especially applies to the Specialized Nutrition Division.

2) Specific commitments made at local or regional level

The Danone subsidiaries in Indonesia have taken the following commitments, in addition to the Danone global commitments.

• Marketing to Children:
• Complies to the applicable local laws and regulations concerning marketing to kids.
• Follows the principles of ethical marketing as set out in Etika Pariwara (Indonesia Ethical Advertising).
• Formula intended for Infants:
• Follows the principles of ethical marketing as set out in applicable Indonesian official Ethical Advertising code/association.
• Reports the supports given to the health care system to the Indonesian government authorities as per applicable regulations.
• Complies with the Code of Ethics of Association of Nutritious Product for Mother and Child Companies (APPNIA) or any other association that ultimately relevant for BMS products/companies.

3) Local regulations / codes of practices

Of course, the Danone subsidiaries in Indonesia follow the local regulations on Marketing to Children:

1. Law on Food.
2. Government Regulations on Food Label & Advertisement.
3. Government Regulations on Exclusive Breast Feeding and its implementing MOH Decrees.
4. BPOM Decrees related with Processed Food Label, Claims in Food Label and Advertisement, Substances in processed food, Food Advertisement, Foods for Special Nutritional Purposes, Monitoring of Drugs and Foods in E-Commerce, Processed Food Registration.
5. Other prevailing laws and regulations related to Marketing to Children.

4) Consequently: what are the rules applied by the Danone subsidiaries in Indonesia

Regarding Marketing in general (consequences of the Danone commitment to follow ICC Code):

• Media covered
• TV & radio
• TV & radio
• Own websites
• Third party websites
• DVDs/CDs/GAMES
• Social media (FB or Twitter feeds of the company or brands)
• All print media (newspapers, magazines, books, and printed advertising in public places)
• Cinema
• Outdoor marketing
• In store marketing/point of sales marketing
• Sponsorship
• Other digital platform, including but not limited to e-commerce
• Communication by Product Advisors
• The Danone subsidiaries in Indonesia:
• Commit that copy, sound and visual presentations in marketing communications for food and beverage products should accurately represent the material characteristics of the product featured, such as taste, size, content nutrition or health benefits, and should not mislead consumers concerning any of those characteristics (Article 5 of ICC)
• Commit to back all nutritional and health-benefit information and claims for food and beverage products with a sound scientific basis. And where claims or terminology used in marketing communications might reasonably be interpreted by a consumer as health or nutrition claims, they will be supported with appropriate scientific evidence (Article 3 of ICC)
• Commit to presenting products in the appropriate portion size and context, and not condone or encourage excess consumption (Article 1 of ICC)
• Commit not to represent food products not intended to be substitutes for meals, as such (Article 5 of ICC)
• Commit not to undermine the concept of healthy balanced diets, or the importance of a healthy active lifestyle (Article 17 of ICC)
• Commit not to use consumer taste or preference tests in a way that might imply statistical validity if there is none. Testimonials are based on well-accepted and recognized opinion from experts. (Article 6 of ICC)

In addition, the Danone CBUs in Indonesia also commit to the following industry best practices:

• Not to use any models with a BMI of under 18.5
• Present products in the context of a balanced diet.

Regarding Responsible Marketing towards Children

• Media covered
• TV & radio
• Own websites
• Third party websites
• DVDs/CDs/GAMES
• Social media (FB, Twitter feeds of company, bands)
• All print media (newspapers, magazines, books, and printed advertising in public places)
• Outdoor marketing
• In store marketing/point of sales marketing
• Sponsorship
• Other Digital Platform
• The subsidiaries in Indonesia will only advertise products to children as per standard defined in the Danone Pledge on Marketing to Children
• When advertising to children, the Danone subsidiaries in Indonesia commit to:
• Support the role of parents or others responsible for guiding diet and lifestyle choices or not to undermine the role of parents or other responsible for guiding diet and lifestyle choices
• Ensure that marketing materials contain an educative message in relation to healthy diets and lifestyles
• Use responsible marketing techniques:
• Not to create a sense of urgency
• Not to use inappropriate price minimization
• Represent foods fairly:
• Objective claims are backed up with adequate substantiation, as would be understood by a child
• The nutritional content of products and the benefits of consumption are fairly and accurately represented
• Clearly differentiate marketing and branding
• Clearly display the company or brand name when advertising on virtual media
• Clearly differentiate, by labeling, advertising and content on virtual media
• Not to brand merchandise aimed at children except related to healthy products
• Only to place products in programs, games, etc. that meet the company's healthy food standard
• Use celebrities responsibly
• Not to sponsor materials, people or activities popular with children (other than sports activities) except in conjunction with healthy product
• Not to use celebrities and other people with strong appeal to children in marketing of products other than those that meet the standard explained above
• Celebrities or others, if used, will not imply they have achieved their enhanced performance or status through use of the product
• Use fantasy and animated characters responsibly
• Not to use third-party fantasy and animation characters with a strong appeal to children in marketing of products other than those that meet the standard explained above, with an exception for point of sale and packaging
• Not to use own fantasy and animated characters with a strong appeal to children in marketing of products other than those that meet the standard explained above, with an exception for point of sale and packaging
• Use promotional toys, games, vouchers and competitions responsibly by using them only in relation to healthy foods

In particular, the Danone subsidiaries in Indonesia apply the following techniques to restrict their online marketing (own corporate and brand websites, third party websites and mobile media):

• Ensuring design of websites/pages is appropriate, i.e. not designed to attract younger children
• Review of traffic data to determine demographic visiting sites
• Nature of third-party websites chosen to advertise on (i.e. ages targeted)

The Danone subsidiaries in Indonesia have a responsible approach regarding schools and places where children gather:

• In PRIMARY schools (schools for children up to age 11): Danone will participate in educational programs to promote healthy lifestyle including but not limited to regular physical activities, healthy hydration and balanced diet, which may include product sampling, where specifically requested by, or agreed with, the school administration for educational purposes. In that case, only products complying with Danone Pledge Nutrition criteria and products intended for children at the age range will be used. Any tools that may be developed in this regard will have explicit educational purposes.
• In SECONDARY schools (schools for children between the ages of 12 and 18): Danone will participate in educational programs to promote healthy lifestyle including but not limited to regular physical activities, healthy hydration and balanced diet, which may include product sampling, where specifically requested by, or agreed with, the school administration for educational purposes.
• In health care facilities: Danone does not advertise products that have similar brand name and/or look and feel with Covered Products (Products intended for baby 0-12 months). Danone only interacts with Health Care System in the form allowed by local regulations in Indonesia, i.e. education, scientific event and research & development.
• In other places where children gather (childcare and other educational establishments, sporting or cultural events held at those premises): Danone will only engage in product marketing communications or in product sampling with products complying with Danone Pledge Nutrition criteria and products for children above 1 year of age. This will be done in consultation with the management of these settings. Danone will not be, directly or indirectly, communicating, promoting or advertising the use of covered products.

5) Responsible Marketing of Formula intended for Infants

The Danone subsidiaries in Indonesia commit to comply to the following principles pursuant to the BMS Policy:

• Acknowledge the importance of, and commit to the principles of, the WHO Code and subsequent relevant WHA resolutions.
• Support the WHO's global public health recommendation calling for exclusive breastfeeding for the first six months of life, followed by the introduction of safe and appropriate Complementary Foods thereafter6 .
• Encourage continued breast-feeding for up to two years and beyond, alongside the introduction of safe and appropriate Complementary Foods after six months of age 1.
• Ensure that the practice of breast-feeding is not undermined through Marketing Material on any of our products.
• Not to advertise or promote Infant Formula or delivery products (such as bottles and teats) in any country where we do business.
• Not to advertise or promote Follow-on Formula, in Higher Risk Countries, including in Indonesia.
• Not to advertise or promote Complementary Food and drinks for use by infants under the age of six months in Higher Risk Countries.
• Support and advocate responsible Marketing practices that promote good health and safe nutrition for all infants and young children.
• Work with Partners, trade associations, industry groups and multiple stakeholders to promote responsible and ethical Marketing practices.
• Work with retail customers and Partners, acting on behalf of Danone involved in bringing our products to the market to establish awareness and emphasize the importance of abiding by relevant laws, the WHO
• Code and this BMS Policy.
• Comply with all applicable local laws and regulations in the countries where we do business.
• Respect the role of national governments to develop health policies that are appropriate to their social and legislative frameworks and overall development objectives.
• Monitor our Marketing practices according to the principles and aims of the WHO Code, independent of any other measures taken by governments to implement the WHO Code, and take steps to confirm that our conduct at every level conforms to our Policy in this regard.
• Support governments in their efforts to implement the WHO Code and cooperate with governments to monitor the application of the WHO Code.
• Ensure that quality is a top priority, with the appropriate leadership and resources to create and deliver a quality and food safety environment that meets strict hygienic and quality control standards, such as international guidelines developed by the Codex Alimentarius Commission and other relevant local laws and regulations.

6) Verification of the compliance to the above commitments

The Danone subsidiaries in Indonesia have their compliance to the above commitments regularly verified by the following means:

• Appointment of an independent external auditor
• Internal audit

Corrective actions are taken if the compliance is not 100% and these actions are monitored by independent functions within Danone.

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