Inside D.C.

McDonald’s “Antibiotics” Play Follows FDA Plan

McDonald’s USA’s recent announcement it’s modifying its “menu sourcing initiative” to buy chicken only from farms which don’t use antibiotics important in human medicine created more of frenzy among the activist community than it did in any other quarter, including the poultry industry.  The beleaguered fast food giant’s two-year “phase-out” isn’t catastrophic to a poultry producer since “medically important” antibiotics aren’t the go-to weapon in the bird health/welfare arsenal, but the company’s statement further confuses the highly politicized issue of on-farm medication use, while providing little benefit to the average McDonald’s customer.

To be clear, the poultry industry primarily uses a class of antimicrobials called “ionophores,” antibiotics developed specifically for poultry and which have no use in human medicine.  Also, this is not McDonald’s first rodeo over antibiotics in agriculture, having examined the issue with stakeholders on both sides, opting to take no drastic actions.  Of course, media don’t report these facts, the government says nothing to put the complex issue of on-farm antibiotic use, its necessity and safety in context, thus leaving the field fertile for those with a political or economic agenda.

The company’s announcement – which also includes the availability of jugs of white milk and low-fat chocolate milk guaranteed to be from cows not given BST – comes after nearly a year of, as one investment advisory newsletter called it, “a perpetual cascade of bad news.” The negatives include multiple food safety issues in China and Japan, both significant McDonald’s markets, along with stagnant sales and revenues in Europe, and similar less-than-stunning performance in the U.S.  This has led to a stock price chart that zig zags in the wrong direction.

So, to the cynic, it plays this way:  Bad PR, slowing sales, static stock price and it’s all hands on deck. The previous CEO is replaced by a new CEO and within days of that announcement, the company says its playing catch-up with the Chipotle’s of the industry as though the McDonald’s customer base is or will be trendy millennial Whole Foods shoppers looking for a local, holistic, natural and/or organic guilt-free menu.  I’m going out on a limb here and take a guess that just maybe taste, value and a tired menu play into the overall sales situation.

Some say the company made a marketing decision using an issue guaranteed to get headlines.  While said headlines scream McDonald’s is phasing out “antibiotics” in chicken, in truth, the company is effectively following the lead and the timeline of FDA.  The food safety agency has worked with the animal drug industry, farmers, feed companies and other stakeholders for the last few years on a cooperative effort to minimize the use of antibiotics in livestock and poultry feed and water.

More than 25 drug companies have formally withdrawn their applications for the use of these products, including human antibiotics, for feed efficiency and growth purposes.  The agency is formally placing all remaining antibiotics for animal/bird disease prevention and treatment under veterinary supervision using what’s called the Veterinary Feed Directive (VFD), essentially a vet’s order for using the medications.  The whole system is to be in place by December, 2016, about same schedule McDonald’s set for its “phase-out.”  I’m sure that’s pure coincidence.

Congressional critics said the McDonald’s move is “encouraging,” but Rep. Louise Slaughter (D, NY), who’s introduced several unsuccessful bills to ban on-farm antibiotic use, says the move isn’t truly significant until “there is an enforceable verifiable limit on agricultural antibiotic use.”  She also wants McDonald’s to phase out beef raised with antibiotics.   Sen. Dianne Feinstein (D, CA) praised the fast food company, reintroducing her bill to require FDA to withdraw approval for medically important antibiotics used for prevention or treatment of diseases in animals “that are at a risk for abuse.”

That no lawmaker introduces legislation to punish medical doctors who overprescribe antibiotics – identified as a major contributor to bacterial resistance – signals ag is seen as the low-hanging political fruit.  Let’s hope other “fast food casual” companies don’t adopt a lemming-like mentality and follow suit.

I tell you, bottom line, it’s all about taste, price and menu.