Shareholder Supporting Statement

Our Company conducts tests on animals as part of its product research and development, as well as retaining independent laboratories to conduct such tests. Abuses in independent laboratories are not uncommon and have recently been exposed by the media. Eli Lilly has posted on its Web site an Animal Care and Use Policy. The Company, as an industry leader, is commended for its stated commitment to an “ethical and scientific obligation to ensure the appropriate treatment of animals used in research …”

However, the disclosure of atrocities recorded at Covance, Inc., an independent laboratory headquartered in Princeton, New Jersey, has made the need for a formalized, publicly available animal welfare policy that extends to all outside contractors all the more relevant, indeed urgent. Filmed footage showed primates being subjected to such gross physical abuses and psychological torments that Covance sued to enjoin People for the Ethical Treatment of Animals in Europe from publicizing it. The Honorable Judge Peter Langan in the United Kingdom refused to stop PETA from publicizing the film and instead ruled in PETA’s favor. The Judge stated in his opinion that two aspects of the video, namely the “rough manner in which the animals are handled and the bleakness of the surroundings in which they are kept … even to a viewer with no particular interest in animal welfare, at least cry out for explanation.”

Shareholders cannot monitor what goes on behind the closed doors of the animal testing laboratories, so the Company must. Accordingly, we urge the Board to commit to promoting basic animal welfare measures as an integral part of our Company’s corporate stewardship.

We urge shareholders to support this Resolution.

Endnotes
1. http://www.lilly.com/about/policies/#animal
2. PETA’s undercover investigator videotaped the systematic abuse of animals at Covance’s laboratory in Vienna, VA over a six month investigation.
3. In October 2005, Covance’s Director of Early Development stated that “We’ve worked with just about every major company around the world” (http://www.azcentral.com/arizonarepublic/eastvalleyopinions/articles/1021cr-edit21.html)
4. The case captioned Covance Laboratories Limited v. PETA Europe Limited was filed in the High Court of Justice, Chancery Division, Leeds District Registry, Claim No. 5C-00295. In addition to ruling in PETA’s favor, the Court ordered Covance to pay PETA £50,000 in costs and fees.

Dear Mr. Greenberg:

I am writing to urge that McDonald’s adopt and implement globally the farm animal welfare standards that it requires of its suppliers.

<Please include a personal paragraph describing yourself and why you are concerned about this issue.>

In America and Great Britain, McDonald’s is a corporate leader in setting standards for its suppliers regarding the humane treatment of farm animals.

However, by failing to adopt and implement animal welfare standards globally, McDonald’s continues to buy from suppliers engaged in egregious cruelty towards animals. Approximately one-half of McDonald’s restaurants are located outside America and Great Britain.

McDonald’s risks harm to its good reputation and image if it continues to buy from suppliers engaged in abuse of animals. Consequently, I urge McDonald’s to protect and enhance its business by ensuring that its suppliers worldwide meet the highest standards for farm animal welfare.

Please write back and tell me what action McDonald’s will take to adopt and implement globally its farm animal welfare standards .

Sincerely,

Your Name

Your Address

WHEREAS, McDonald’s has already made commendable steps toward improving animal welfare; and

WHEREAS, despite its commitment to animal welfare, McDonald’s continues to purchase chickens from suppliers that use the outdated method of electrical stunning, in which the birds’ legs are snapped into metal shackles and the birds are shocked with an electric current, have their throats slit, and are dropped into tanks of scalding-hot water so that they are often still conscious when they suffer this hideous cruelty; and

WHEREAS, acknowledging the cruelty of electrical stunning and the need for humane slaughter methods in order to retain a competitive advantage, our company commissioned an Animal Welfare Feasibility Study of Controlled Atmosphere Stunning for Broilers (“the report”) that addresses the feasibility of phasing in a method of slaughter called “controlled-atmosphere killing” (CAK), which replaces the oxygen that birds are breathing with inert gasses, gently and effectively putting them to sleep; and

WHEREAS, the report concurred that CAK is, as animal welfare experts have described it, the most humane method of poultry slaughter ever developed and admitted that CAK “has advantages [over electrical stunning] from both an animal welfare and meat quality perspective … obviates potential distress and injury … can expeditiously and effectively stun and kill broilers with relatively low rates of aversion or other distress” and would eliminate the pain of premature shocks and inadequate stunning that are associated with electrical stunning; and

WHEREAS, the report further concludes that McDonald’s European suppliers that use CAK have experienced improvements in bird handling, stunning efficiency, working conditions, and meat yield and quality;[1] and

WHEREAS, although CAK is optimal for both the birds and for profit, McDonald’s has yet to implement it and has asserted a need for further research despite the fact that CAK has been widely and successfully used in Europe for nearly a decade and that there is no competing scientific claim suggesting that CAK is not optimal for animal welfare; and

WHEREAS, in its report, McDonald’s represents that it will “accelerate further developmental work” on CAK but provides no timeline or plan of action; and

WHEREAS, considering that McDonald’s commits on its Web site to “lead our industry [by] working with our suppliers and industry experts to advance animal welfare practices and technology,” if McDonald’s aspires to be the industry leader, then it must truly “accelerate” the development of CAK as promised and not merely delay it under the guise of needing further study;

NOW, THEREFORE, BE IT RESOLVED that shareholders request that the Board of Directors issue interim reports to shareholders following the second, third, and fourth quarters of 2006 that detail the progress made toward accelerating development of CAK.

Shareholders request that the Board of Directors issue a report to shareholders by October 2003, prepared at reasonable cost and omitting proprietary information, reviewing McDonald’s animal welfare standards with the view to adopting and enforcing consistent animal welfare standards internationally.

SUPPORTING STATEMENT:

Our company’s farmed animal welfare practices in the U.S. and U.K. make McDonald’s a corporate leader in those countries.

• In its “Animal Welfare Guiding Principles,” our company states, “McDonald’s commitment to animal welfare is global … McDonald’s sets annual performance objectives to measure our improvement and will ensure our purchasing strategy is aligned with our commitment to animal welfare … McDonald’s will communicate our process, programs, plans and progress surrounding animal welfare.”
• McDonald’s stated in last year’s proxy: “The Guiding Principles express our commitment to the raising, transportation and slaughter of animals in a manner that is free of cruelty, abuse and neglect. The Guiding Principles are applicable to all suppliers (i.e., all suppliers from which the Company purchases product) on a worldwide basis … the Company, together with its outside experts, works with its suppliers to develop systems to monitor and assess the effectiveness of the suppliers’ animal handling practices. … We operate in 121 countries, and it is a tremendous task to monitor every supplier in every country immediately. We are making progress … we already report to shareholders about our animal welfare program on our website at www.mcdonalds.com.”
• Our company states that “different markets may develop additional standards and compliance systems [for animal welfare] appropriate to the legal framework, supply chains, and culture of the area.”

However:

• Despite exemplary practices in the U.S. and U.K., more than one-half of our company’s 29,000 restaurants operate elsewhere. Some standards implemented in the U.K. apply exclusively in that country (e.g., battery cage and gestation crate bans). McDonalds.com’s “Animal Welfare Progress Highlights (1999-2002)” discusses many policies that apply only in the U.S., without mentioning that they are only in the U.S.
• Our chief competitors, Burger King and Wendy’s, have adopted standards similar to our U.S. standards and apply them internationally.
• Our company has not made known any global program. McDonalds.com makes no reference to improved conditions in the raising of any animals (other than laying hens), transportation of any animals, use of experts, any programs or evaluation methods, “performance objectives,” or any “process, programs, plans, or progress” outside the U.S.

McDonald’s Community Affairs Director Bob Langert has stated, “No longer are extremists driving the debate. Mainstream consumers are the primary force.” We believe that our company risks harm to its reputation and image if it buys from suppliers engaged in animal abuse while it continues to assert its adherence to a program that it has not implemented. We urge our company to continue to protect and enhance its good reputation and business by ensuring that its public statements are accurate and that its suppliers worldwide meet the highest standards for the humane treatment of farmed animals by adopting the proposed resolution.

Shareholders request that the Board of Directors issue a report to shareholders by October 2002, prepared at reasonable cost and omitting proprietary information, reviewing McDonald’s animal welfare standards with the view to adopting and enforcing consistent animal welfare standards internationally.

SUPPORTING STATEMENT:

Our company’s public policy and practices towards the welfare of farm animals, as currently implemented in the United States and United Kingdom, make McDonald’s a corporate leader in those countries.

• In the U.S., our company has prohibited some abuses and details these improvements on our company’s Web site, which includes this statement: “McDonald’s believes that the humane treatment of animals is an integral part of our world class supplier system. Therefore, we buy all our beef, pork and poultry products from suppliers who maintain the highest standards and share McDonald’s commitment to animal welfare.”

• In the UK, McDonald’s has gone further, prohibiting battery cages for hens and gestation crates for pigs. McDonald’s stamps the RSPCA’s “Freedom Food” logo on its products that contain eggs, and in an October 2001 advertisement, our company declares that it “Has established a comprehensive set of animal welfare standards for suppliers… Has independent food safety auditing systems for all beef, pork, and chicken abattoirs…”

By failing to adopt animal welfare guidelines internationally, however, McDonald’s continues to buy from suppliers engaged in egregious cruelty towards animals in contravention of our company’s stated policies.

• Approximately one-half of our company’s 29,000 restaurants are not in the U.S., U.K., or Australia. Some standards implemented in the UK apply exclusively in that country, where fewer than one-twentieth of McDonald’s restaurants operate.

• Outside the U.S., U.K., and Australia, there is no evidence that McDonald’s has implemented animal welfare standards, despite practices that our company has prohibited elsewhere.

• As one example, our company has been provided with video documentation of a purported McDonald’s supplier in Central America stabbing cows in the back of the neck in an egregiously abusive manner of slaughter. McDonald’s has more than 1,500 restaurants in Latin America, where farm animal welfare standards are virtually non-existent.

Our company risks harm to its good reputation and image if it continues to buy from suppliers engaged in such abuse of animals.

• Our chief competitors, Burger King and Wendy’s, have adopted standards similar to our U.S. standards, and apply these standards internationally.
• Bob Langert, McDonald’s Senior Director for Community Affairs has stated that: “No longer are extremists driving the debate. Mainstream consumers are the primary force.”
• Newspapers and television stations around the world have reported extensively on animal welfare campaigns and our company’s animal welfare standards.
• Animal rights activists have not targeted our company in any concerted way since McDonald’s adopted guidelines and enforced them more than one year ago.

Consequently, we urge our company to continue to protect and enhance its good reputation and business by ensuring that its suppliers worldwide meet the highest standards for the humane treatment of farm animals.