Two of the world's largest food distribution companies have denied charges they failed to follow international guidelines for marketing infant formula in Third World countries.

Both the Swiss-based Nestle SA and American Home Products Corp. responded quickly this week when Action for Corporate Accountability announced it was renewing a boycott against Nestle products and extending it to American Home Products.Leaders of the Minnesota-based group engineered a seven-year boycott against Nestle that ended in 1984 when the company agreed to an infant formula marketing code worked out with the World Health Organization and UNICEF, an arm of the United Nations.

Boycott leaders said they were renewing their call for the marketplace action because Nestle and American Home Products were not abiding by the agreement.

"Nestle has worked diligently to ensure its marketing policies follow WHO recommendations," company spokesman Thad M. Jackson said in Washington.

Carol Emerling, a spokewoman for American Home Products, said, "This whole activity is based on allegations that we violate the WHO code - and we flat out deny it.

"The real issue is infant health," she said. "Breast-feeding is best for infants; we've always said that. But every infant who is not receiving breast milk has the right to the best alternative available."

Boycott leader Douglas A. Johnson, chairman of Action for Corporate Accountability, contended at a news conference that Nestle and American Home Products and - to a lesser degree - other formula distributors are interpreting the guidelines in a way that allows them to skirt the intent and encourage mothers who could breast feed their babies to use formula instead.

Although Johnson does not have a blanket objection to using infant formula, he maintains it is wrong for manufacturers to encourage its use in powdered form in Third World countries where most mothers typically don't have the money, education and sanitary facilities to mix it properly.

The result, he argues, is that thousands of Third World babies develop often fatal diseases because they drink from bottles with understrength formula that either does not give them the nutrients they need or infects them with various germs, or both.