Activist investor challenges fast-food chain over suppliers’ treatment of animals
Mr. Icahn’s animal-rights campaign was seen as a long shot from the start, given that it was a far cry from his typical activist fight. This did not present a clear financial upside for McDonald’s shareholders, and it had a smaller McDonald’s stake, meaning it needed to persuade a larger-than-usual portion of shareholders to support its cause. Was.
Mr Icahn could present the campaign as a partial victory, as it raised awareness of the issue, which he had first covered 10 years earlier at the behest of his daughter and the Humane Society of the United States.
McDonald’s suppliers at the center of the conflict use so-called gesture crates, small cages used to constrain pregnant pigs. Suppliers have said the crates make breeding more efficient, while Mr Icahn and his nominees say they are inhumane.
In 2012, McDonald’s pledged to stop buying pork from producers using crates by 2022. Little did they know that Mr Icahn had quietly emphasized the changes behind the scenes.
This year, Mr Icahn has argued McDonald’s failed to comply with the pledge and changed its interpretation of the pledge. McDonald’s now often lets its producers take pigs out of containers after confirming they are pregnant, which many people wait to do until the sows are four to six into their 16-week gestation. It’s not a week.
Mr Icahn expected the use of the crate to be banned altogether.
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McDonald’s has said that more than 60% of its US pork is sourced from pigs that are not kept in womb crates after they are confirmed to be pregnant, and by the end of this year that figure will rise from 85% to 90 percent. % is expected.
The company says that Mr Icahn’s demand is impractical as it would lead to a significant increase in cost and financial burden on customers.
Mr. Icahn tried to appeal to the large index funds focused on socially conscious investing, whose backing is key in most proxy fights. He argued that despite being at the forefront of the environmental, social and governance investment movement, BlackRock Inc.
And others have chosen thematically about what principles they care about and place little emphasis on animal welfare.
—Heather Hayden contributed to this article.
Credit: www.wsj.com /