Activist investor pressures Mcdonald’s on supply chain abuses

13 May, 2022

Recent claims on pork production “pull wool over eyes” of investors, Icahn

Activist investor Carl Icahn has written to fellow McDonald’s shareholders taking issue with the company’s continued failure to combat animal cruelties along its supply chains. 

Now the outspoken financier is urging shareholders to vote on his two board member nominees in a bid to change these practices.   

According to the letter, available on the Securities and Exchange Commission (SEC) website, the fast food corporation has reneged on its 2012 pledge to source pork from suppliers who do not confine pigs in gestation crates or individual stalls.  

Icahn said that McDonald’s recent claim that it expects to source 85% to 90% of its US pork for sows “not housed in gestation creates during pregnancy” was a “cynical fabrication” intended to pull the wool over the eyes of investors: 

“In reality, these sows, who have multiple litters of piglets each year, are confined in gestation crates during each pregnancy for approximately four to six weeks, 24 hours a day, seven days a week. They will spend these weeks immobilised in tiny crates, not much bigger than their bodies, where they can’t even turn around,” he said in the letter.  

Icahn is currently involved in various proxy exploits, including an attempt to shake up the board of directors at US retail company, Kroger, with the appointment of Alexis C. Fox and Margarita Palau-Hernandez. 

Icahn similarly expressed concerns over Kroger’s animal welfare abuses.  

Like Mcdonald’s, the company also uses gestation crates in its production of pork. Icahn has also flagged the company’s treatment of employees as an issue.  

He said in his proxy statement that the company had failed to protect shareholder interests “with respect to the company’s mistreatment of its employees and its hollow commitments to environmental, social and governance (ESG) practices.” 

Kroger replied to the move with a response emphasizing its engagement with animal welfare groups such as the Humane Society of the United States.