McDonald’s Corp investors soundly rejected a shareholder proposal that would have required the world’s biggest fast-food chain to assess its impact on childhood obesity.
The subject was a major topic of discussion at Thursday’s annual shareholder meeting, which also served as a send-off for retiring Chief Executive Jim Skinner - whose nearly eight years at the helm will be remembered as a time when the price of McDonald’s stock tripled.
The shareholder proposal, which also failed last year, returned amid growing concern over the social and financial costs of obesity in the United States and around the world - not only in terms of healthcare-related expenses but also lower worker productivity and diminished quality of life.
Nearly one-third of U.S. children are overweight or obese. America is one of the fattest nations on earth, and the Institute of Medicine, in a 2006 report requested by Congress, said junk food marketing contributes to an epidemic of childhood obesity that continues to rise. The institute is the health arm of the National Academy of Sciences.
McDonald’s executives on Thursday defended the brand and its advertising.
“We’re proud of the changes we’ve made to our menu. We’ve done more than anybody in the industry around fruits and vegetables and variety and choice,” said Skinner, who will retire on June 30 and who received a standing ovation from investors.
McDONALD’S HEALTH FOOTPRINT
As one of the largest and most influential companies in the restaurant industry, McDonald’s often bears the brunt of criticism from consumers, parents and healthcare professionals, who want it to serve healthier food and curb its marketing to children.
McDonald’s stockholders reject obesity proposal
McDonald’s Corp spurned calls to assess the impact of its food on childhood obesity, and said its trademark clown Ronald McDonald would be hawking Happy Meals to kids for years to come.
“This is about choice and we believe in the democratic process,” Chief Executive Jim Skinner told a packed room at its shareholders’ meeting, to an enthusiastic wave of applause. “This is about the personal and individual right to choose.”
Shareholders of the world’s largest fast-food chain resoundingly rejected a proposal that would have required it to issue a report outlining its role in the childhood obesity epidemic, saying customers were free to make their own dietary choices.
“Ronald McDonald is an ambassador to McDonald’s and he is an ambassador for good. Ronald McDonald is going nowhere,” Skinner said firmly, prompting more cheers from shareholders.
Among the dissenters at the meeting was Dr. Donald Zeigler, director of Prevention and Health Lifestyles at the American Medical Association, who asked when the burger chain will stop marketing to children using Ronald McDonald.
While the chain has added food like salads, oatmeal and smoothies to its menu, it has pulled ahead of rivals and delivered outsized returns for investors with help from its core lineup of fatty food and sugary drinks.
Corporate Accountability International, a business watchdog group, for the second year in a row backed the obesity proposal, which was endorsed by 2,500 pediatricians, cardiologists and other healthcare professionals.
It called on the company to issue a report on its “health footprint.” The document would evaluate how diet-related illness would affect McDonald’s profit.
In the time since the last shareholder vote, McDonald’s has changed the contents of its popular Happy Meals for children - reducing the french fry portion by more than half and automatically including apples in every meal.
What Role Does Advertising Have in Childhood Obesity?
Childhood obesity has more than tripled in the past 30 years. Obesity in children 6 to 11 has gone from 6.5 percent in 1980 to almost 20 percent in 2008. Parents are frantic, health professionals are alarmed and activists are up in arms.
Legislators are calling for a tax on soft drinks; some states are making it a requirement for restaurants to post calories on their menus. A few weeks ago Pepsi and others voluntarily pulled sugar-laden soft drinks from schools and the advocacy group Corporate Accountability International last week targeted the venerable spokes-clown for McDonald’s, Ronald McDonald, saying for nearly 50 years he has hooked kids on unhealthy food, spurring an epidemic of diet-related diseases.
What role has advertising played in the disturbing obesity epidemic facing American kids and are marketers being responsible in their advertising practices?
Most experts agree there is no single reason the youth of America are increasingly overweight. Lack of exercise, an increase in the availability of snacks and soft drinks in school, the growing number of fast food outlets in the country, the trend to larger portion sizes and the dramatic increase in the amount of time kids spend with media - all play a part. The average kid spends 5 1/2 hours a day consuming media - more time than kids spend doing anything else except sleeping.
It also won the dismissal of a lawsuit that sought to stop the company from using free toys to promote its Happy Meals for children in California.