Carl Icahn pressuring McDonald’s to improve welfare of pigs raised for meat

  • 2/22/2022
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One of Wall Street’s most fearsome activist investors has launched a campaign to force McDonald’s to change the way it buys pork for its Bacon McDouble Cheeseburgers, Sausage McMuffins and McRib sandwiches. Carl Icahn, whose long history as an asset stripper precedes him, plans to challenge the practice used by some of McDonald’s pork suppliers of confining pregnant pigs in small crates and not in group housing. Ichan is best known as an aggressive investor whose history spans hostile efforts to take over companies ranging from TWA, Marvel Comics, RJR Nabisco and US Steel, sometimes ruthlessly “downsizing” companies he takes over. He owns just 200 shares in McDonalds, valued at approximately $50,000 – far less than the multimillion stakes he typically acquires in companies he targets. But he is using his holding – and his reputation – to push for Leslie Samuelrich, a sustainability-focused investor and president of Green Century Capital Management, and Maisie Ganzler, an executive at Bon Appétit, a restaurant management company, to be put on McDonald’s board. The fast-food giant promised 10 years ago to end its suppliers’ crate practice and said Sunday that it expects to source 85% to 90% of its US pork from pigs not housed in “gestation stalls” during pregnancy, up from 60% currently, by the end of this year. But Icahn, who became involved in the issue at the behest of his daughter, Michelle Icahn Nevin, says he had expected the use of the crates to be banned altogether, not merely have sows moved from crates only after they are confirmed pregnant four to six weeks into their 16-week term. McDonald’s said it would be “impossible” to meet Icahn’s request to end the practice immediately as it would go against “veterinary science” and “harm the company’s shared pursuit of providing customers with quality product at accessible prices.” And McDonald’s did not welcome Icahn’s intrusion, saying in a statement in response to Icahn’s notification that it would “evaluate the nominees as it would any other candidates proposed to it” at its annual shareholder meeting in April. “Mr Icahn’s stated focus in making this nomination relates to a narrow issue regarding the Company’s pork commitment, which The Humane Society US has already introduced through a shareholder proposal,” the company said. The investor’s efforts to pressure McDonald’s comes a year after several members of Exxon’s board of directors were pushed out in a shake-up by activist shareholders looking for the oil giant to act decisively on climate change. Icahn told Bloomberg TV last week that he was committed to taking action, despite McDonald’s explanation that outbreaks of swine disease and the Covid-19 pandemic delayed producers’ ability to meet its original timeline by two years. “We’re not going to fool around with them any more,” he said. But the company shot back, critiquing Icahn for his majority holdings in Viskase, a firm that produces packaging, such as sausage casings, for pork and poultry. “It’s noteworthy that Icahn has not publicly called on Viskase to adopt commitments.” The conflict also highlights the limited and often slow progress that food producers have made in altering their supply chains. McDonald’s says it sources only approximately 1% of US pork production and does not own any sows, or produce or package pork in the US. “More than ever, our customers want to know how their food is produced and where it comes from,” the company posted on its Animal Health & Welfare page, adding that it is using its size and global reach “to improve animal health and welfare” and “source chicken, eggs, beef and pork from producers who share our commitments”. A 2005 study commissioned by the American Society of Swine Veterinarians asserted that “pigs are explorative by nature, and exploratory behavior is considered an important component of pig welfare”. The study noted “the difficulty experienced by sows in advanced gestation when the space is restricted”, adding that “it appears that increasing available space in gestation stalls would improve sow welfare”.

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