The Humane Society of the United States is asking US securities regulators to investigate McDonald’s Corp. for the burger chain’s alleged “dissemination of false or misleading information” about the treatment of pigs in the company’s supply chain.
In February, McDonald’s said that by the end of 2022 it expected 85% to 90% of its pork in the US to come “from sows not housed in gestation crates during pregnancy.” But the Humane Society disputed that claim in a complaint filed Friday with the Securities and Exchange Commission, saying McDonald’s recent proxy filing confirms that pigs are still kept in those cages for weeks early in their pregnancies.
The group’s action is the latest in a series of steps by activists trying to rid the pig industry of crates that are too small for sows to turn around. They have recently targeted McDonald’s and rival fast-food chain Wendy’s Co.
In 2012, McDonald’s pledged to get rid of cages by the end of 2022. But the Humane Society alleges the chain has “quietly” backed away from that promise, now saying it applies only after a pregnancy has been “confirmed.” . That means the sows could be in crates for up to six weeks of their 16-week term.
The company’s April 8 proxy statement, cited in the lawsuit, sets out the policy more clearly: “In 2012, McDonald’s began informing its U.S. pork processors and suppliers that if it were confirmed that a sow was pregnant, then the producer would be required to remove that sow from a gestation stall and place her in group housing.” According to the Humane Society, McDonald’s publicly confirmed what it had told the group privately: that its “policy actually allows pregnant sows to be kept for weeks in gestation crates.”
As a result of the disclosure, the Humane Society is withdrawing a previously filed shareholder resolution that sought further details about the pork company’s reliance on producers using gestation crates. McDonald’s February statement is “a hoax and a violation of federal securities laws,” the group said in the SEC lawsuit.
In an email, McDonald’s said the allegations “are completely unfounded and amount to nothing more than a family stunt by the Humane Society of the United States to raise funds and attract media attention.” The company “has been, and will continue to be, an industry leader in pursuing pioneering animal welfare policies.”
In March, the SEC ordered Wendy’s to include in its proxy materials a proposal from Humane Society shareholders that could force the restaurant company to disclose the use of gestation crates in its pork supply chain. The organization has begun working with activist investor Carl Icahn on the issue. Icahn has proposed new members for the McDonald’s board of directors and has also taken the fight to Kroger Co.
The pig industry says that housing pregnant sows in stalls prevents them from fighting and prevents injuries.
Eliminating the boxes is possible, but it would make pork more expensive, according to Steve Meyer, a consulting economist with the National Pork Board and the National Council of Pork Producers. McDonald’s has made a similar comment in response to Icahn’s recent efforts.
Still, Meyer said, the pressure is already having an impact and could lead to more change.
“I think they will make progress,” he said of the activists. “I wouldn’t build a building with gestation stalls right now.”