The Humane Society of the United States on Friday asked the U.S. Securities and Exchange Commission to investigate McDonald’s, arguing that the company has been making misleading comments regarding its use of pork from suppliers that use gestation crates for pregnant sows.
In its SEC filing, the Humane Society takes issue with McDonald’s statements that 85% to 90% of its pork supplies comes from pigs not housed in gestation crates. It argues that “nearly all of this pork comes from pigs who are, in fact, confined in gestation crates during as much as 40% of their pregnancies.”
The society argues that McDonald’s isn’t keeping sows out of gestation crates, which severely restrict their movement. Instead, it is simply reducing the time spent there and that pregnant pigs can still spend weeks in the enclosures. “These animals continue languishing in gestation crates for substantial portions of their lives—10 years after the company promised better conditions for them by 2022,” Kitty Block, CEO of the Humane Society, wrote in a blog post.
The SEC complaint represents the latest chapter in an intensifying battle between McDonald’s and animal welfare advocates, who’ve received a powerful backer in Carl Icahn, the famed activist investor.
Icahn is trying to win two seats on the company’s board, based almost purely on what he and the Humane Society say is McDonald’s broken promise to stop buying pork from producers that use gestation crates.
McDonald’s over the years has worked with various animal welfare experts on a variety of topics as it has sought to build its credibility on sustainability issues. But it is taking a hard line on the topic, pushing back aggressively against Icahn and his two nominees—the burger giant argues that they are “single-issue” director nominees that would push out other, more well-qualified directors.
But it has also saved some of its criticism for the Humane Society itself. In its response to Icahn’s latest missive on the topic on Thursday, McDonald’s argued that the society’s definition of what represents “crate-free” pork is “obscure” and “represents an extremely niche market.”
The topic is pitting McDonald’s, the world’s largest restaurant chain, against Icahn, one of the world’s best-known activist investors known most for pushing Wall Street on improving “shareholder value.” He has turned himself into a champion of animal welfare policies in this issue, fully backing the Humane Society’s argument that McDonald’s broke a promise when it said it would eliminate the use of gestation crates by 2022.
McDonald’s, for its part, argues that it has been taking steps on this issue and notes that it only buys about 1% of the U.S. pork supply. More to the point, it says fulfilling the demands of the Humane Society would lead to considerably higher costs.
“McDonald’s today pays a premium to purchase group-housed pork in accordance with our 2012 commitment,” the company said. Sourcing from the niche market the Humane Society and Icahn want, “would significantly increase those costs, placing a burden on all aspects of our business, our supply chain and McDonald’s customers, while lacking the broad support from industry experts.”
The Humane Society said that it and McDonald’s issued a joint press release in 2012 announcing the burger chain’s intent on ending confinement in gestation stalls. It also said the company released its 10-year plan to end gestation crate use. The society also said in its lawsuit that McDonald’s continued to advertise this policy for years.
But it says that McDonald’s started shifting away from that commitment in 2019, changing its language to reflect that it was working with suppliers to “phase out” gestation sows by 2022.
The society filed a shareholder proposal last year to get McDonald’s to make clear its progress on the topic. After that, the advocacy group said in its complaint, the company said that it only considers a sow to be gestating after it is confirmed pregnant. The Humane Society says McDonald’s policy permits pregnant pigs to be kept in crates for as many as six weeks, and argues that it is misleading shareholders by saying it is working to “eliminate” the crates.
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