McDonald’s targeted in complaint to SEC over pig crates

The US Humane Society is asking US securities regulators to investigate McDonald’s regarding its treatment of pigs.

The Humane Society of the United States is asking U.S. securities regulators to investigate McDonald’s Corp. over the burger chain’s alleged “dissemination of false or misleading information” regarding 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 U.S. to come “from sows not housed in gestation crates during pregnancy.” But the Humane Society challenged 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 such cages for weeks early in their pregnancies.

The group’s action is latest in a series of steps by activists trying to rid the pork industry of crates that are too small for sows to turn around. They’ve targeted McDonald’s and rival fast-food chain Wendy’s Co. recently.

In 2012, McDonald’s pledged to get rid of the cages by the end of 2022. But the Humane Society alleges the chain has “stealthily” walked back that promise, and now says it applies only after the pregnancy has been “confirmed.” That means sows could be crated for as much as six weeks of their 16-week term.

The company’s April 8 proxy statement, cited in the complaint, puts the policy more clearly: “In 2012, McDonald’s began informing its U.S. pork processors and suppliers that if a sow was confirmed to be pregnant, then the producer would be required to remove that sow from a gestation stall and place it in group housing.” According to the Humane Society, McDonald’s publicly confirmed what it had privately said to the group: that its “policy does in fact permit 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 seeking more specifics on the company’s reliance on pork from producers using gestation crates. The February statement from McDonald’s is “a deception, and a violation of federal securities laws,” the group said in the SEC complaint.

McDonald’s had no immediate comment Friday.

In March, the SEC directed Wendy’s to include in its proxy materials a shareholder proposal from the Humane Society 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 board members for McDonald’s, and has taken the fight to Kroger Co. as well.

The pork industry says housing pregnant sows in the stalls keeps them from fighting and prevents injury.

Eliminating the crates is possible but would make pork more expensive, according to Steve Meyer, a consulting economist for the National Pork Board and National Pork Producers Council. McDonald’s has made a similar point in responding to Icahn’s recent efforts.

Still, Meyer said, the pressure is already having an impact and could lead to more changes.

“I think they will make inroads,” he said of the activists. “I wouldn’t build a building with gestation stalls in it now.”