Feb 21, 2022 - Economy

McDonald's goes on defensive as Carl Icahn escalates pig welfare fight

A photo of a McDonalds' McRib sandwich

Photo: Paul J. Richards/AFP via Getty Images

McDonald's didn't pull punches after activist investor Carl Icahn launched a proxy fight over the weekend to pressure the fast-food giant over the treatment of pigs used in its pork products.

Why it matters: Icahn, who has become known for aggressive activist campaigns targeting companies he views as inefficient, is asking McDonald's to prioritize an issue other than profit.

  • McDonald's said on Sunday that Icahn had nominated two people for board seats. The move was first reported by the Wall Street Journal.

The big picture: At issue is the way McDonald's suppliers treat pregnant pigs. Icahn and the Humane Society of the United States have asked the company to end the practice of keeping sows in confined spaces known as gestational crates.

  • In 2012, the company promised to phase out the practice within a decade. It said on Sunday that it "expects to source 85% to 90% of its U.S. pork volumes from sows not housed in gestation crates during pregnancy."
  • At the time, the Humane Society applauded the move. But the organization has since become critical of McDonald's effort and said it fears that the company will move to reduce the practice by its suppliers, rather than end it.

What they're saying: In a statement, McDonald's fired back at the activist investor, saying the "current pork supply in the U.S. would make this type of commitment impossible."

  • "Furthermore, it reflects a departure from the veterinary science used for large-scale production throughout the industry, and would harm the Company’s shared pursuit of providing customers with high quality products at accessible prices."

The company claimed Icahn owns just 200 shares of McDonald's stock and is the majority owner of a company that "produces and supplies packaging for the pork and poultry industry."

  • It added that "it's noteworthy that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to those of McDonald’s 2012 commitment."

Icahn told the Journal earlier this month that "animals are one of the things I feel really emotional about," adding that he feels particularly affectionate toward pigs.

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