KANSAS CITY, MO. – McDonald’s Corp. responded to criticism and complaints about the company’s animal welfare policies and practices.

In an open letter to shareholders, Carl Icahn, a famous investor who launched a proxy fight with McDonald’s over the company’s sourcing of pork, said McDonald’s shareholders have the power “to ensure that the McDonald’s board is held accountable for its broken promises and ESG [environmental, social and governance] failures – and that tangible progress takes hold at the Company and across the industry.”

Icahn said he is calling on McDonald’s to:

  • Commit to eliminating gestation crates (zero days in stalls) from its supply chain by the end of 2023, which it failed to do this year despite having a decade to do so.
  • Extend the company’s gestation crate elimination goal to its global supply chain by 2024, whereas the commitment previously applied only to the US.
  • Commit to sourcing its pork from suppliers that abide by Proposition 12’s standards regardless of the law’s status, which some of America’s largest pork producers have already publicly stated can be implemented.
  • Adhere to Sustainability Accounting Standards Board disclosures in accordance with the “Meat, Poultry & Dairy Industry” standard FB-MP-410a.1, which requests disclosure of the “percentage of pork produced without the use of gestation crates” (zero days in stalls).
  • Add two new directors to help the board effectively oversee leadership and ensure the company’s commitments are upheld.

In a statement, McDonald’s defended its commitment to animal welfare and characterized Icahn’s demands as “unfeasible.”

“McDonald’s only sources approximately 1% of US pork production and does not own any sows, or produce or package pork,” the company said. “Despite McDonald’s progress on our commitment to source from producers who do not use gestational crates for pregnant sows, Mr. Icahn has asked for new commitments. These include requiring all of McDonald’s US pork suppliers to move to “crate-free” pork and set specific timeframes for doing so.

“The definition of “crate-free,” conjured up by the Humane Society of the United States (HSUS), is so obscure that it represents an extremely niche market comprising less than 0.1% of US pork production. This presents a challenge of supply. What Mr. Icahn is demanding from McDonald’s and other companies is completely unfeasible. Based on current estimates, McDonald’s would require at least 300-400 times the animals housed today in “crate-free” systems to keep our supply chain running.”

The company added that Icahn’s demands also are expensive. McDonald’s currently pays a premium to buy pork sourced from group-housed pigs in accordance with the company’s 2012 commitment regarding group housing for pregnant sows.

“Sourcing from this niche market, as Mr. Icahn, his Director nominees – Maisie Ganzler and Leslie Samuelrich – and HSUS suggest, would significantly increase those costs, placing a burden on all aspects of our business, our supply chain and McDonald’s customers, while lacking the broad support of industry experts,” McDonald’s said.

McDonald’s again noted Icahn’s majority stake in Viskase, a company that produces and supplies packaging for the pork and poultry industry.

“Viskase has no public commitments similar to those McDonald’s championed in 2012 and does not limit its business to meat producers who raise their animals in the “crate-free” housing systems espoused by HSUS,” McDonald’s said.

HSUS, a McDonald's shareholder, called on the Division of Enforcement at the Securities and Exchange Commission (SEC) to investigate McDonald’s earlier statements about the pigs the company uses in McDonald’s products to determine if those statements were misleading investors about McDonald’s pledge to eliminate gestation crates from is US pork supply chain.

In November 2021, HSUS filed a shareholder proposal asking if McDonald’s has been misleading its investors about its pledge to eliminate gestation crates from its US pork supply by reducing the amount of time the company permits suppliers to keep pigs inside the crates.

“In response to our shareholder proposal, McDonald’s has admitted — albeit very briefly in a few lines of a lengthy SEC filing — that indeed, it is not eliminating gestation crates for pregnant sows. The company’s proxy statement issued this month states that McDonald’s continues to let its US pork suppliers confine pigs in gestation crates for as many as six weeks out of each 16-week pregnancy cycle,” HSUS said. “That very brief statement in a long and complex document not only confirms the suspicions that motivated our shareholder proposal, but it also validates our ongoing efforts to hold McDonald’s accountable, not only for the pigs in its supply chain but for the truth concerning its business practices.”

McDonald’s has reiterated its commitment to providing its customers with food that is sourced “ethically, responsibly and humanely” saying “we take our role in providing that seriously.”

“Value and accessibility are also important, particularly as customers confront rising costs in all aspects of daily life,” McDonald’s added. “Lacking broad support from industry experts, his campaign would have one certain outcome: a greater financial burden on customers.”