KFC faces pressure after McDonald's says no antibiotics in chicken

McDonald’s will phase out chicken raised with antibiotics that are important to human health over two years to allay concern that use of the drugs in meat production has exacerbated the rise of deadly “superbugs” that resist treatment, Reuters reported last week. Within days, retailer Costco Wholesale Corp (COST.O) told Reuters it aims to eliminate the sale of chicken and meat raised with human antibiotics.

KFC is owned by Louisville, Kentucky-based Yum Brands Inc (YUM.N), which has no publicly stated policy on antibiotic use in the production of meat it buys. Chick-fil-A, another chicken restaurant chain that competes with KFC, says about 20 percent of the chicken it serves is raised without any antibiotics, and that its entire supply chain will be converted by 2019.

Both McDonald’s and Yum are stepping up efforts to win back younger and wealthier diners lured away by chains such as such as Chipotle Mexican Grill Inc (CMG.N) and Panera Bread Co (PNRA.O), which boast antibiotic-free meats and other high-quality ingredients. Yum’s KFC restaurants in China two years ago suffered a massive sales hit following local media reports that a few poultry farmers supplying KFC fed excessive levels of antibiotics to their chickens.

“The train has left the station,” Bob Goldin, a food services company consultant at Technomic in Chicago, said of McDonald’s influence on U.S. chicken production standards.

Yum, which also owns the Taco Bell and Pizza Hut chains, declined to discuss its standards for antibiotic use in meat production.

“The chicken served in our U.S. restaurants is USDA high quality, and free of antibiotics,” the company said in an emailed response to Reuters queries.

The antibiotic-free statement refers to a lack of residue in the meat served at its restaurants and not the practice of delivering antibiotics to chickens before they are slaughtered, said Steven Roach, food safety program director at Food Animal Concerns Trust in Chicago.

The U.S. Department of Agriculture has three classifications for poultry, A, B, and C, and doesn’t have a “high quality” designation for chicken. Poultry rated A is what’s typically found at retail, while poultry rated B or C is usually used in further-processed products where the meat is cut up, chopped, or ground, according to a USDA website.

NOT PART OF THE CONVERSATION

McDonald’s told Reuters it worked with a wide range of stakeholders, including environmental group Friends of the Earth, to develop its U.S. chicken guidelines. Yum and its brands have ignored requests for information regarding its antibiotic policy, said Kari Hamerschlag, senior program manager for Friends of the Earth’s food and technology program.

“They have so far not answered any of our emails or phone calls,” said Hamerschlag, who is working with other advocacy groups to persuade food companies to change their supplier standards to exclude animals raised with the routine use of antibiotics. By contrast, McDonald’s was “very responsive” to the groups’ requests, she said.

Other groups working with Friends of the Earth to cut antibiotics from chickens and other meats include the Natural Resources Defense Council, Consumers Union and the Center for Food Safety. Friends of the Earth said its interest in antibiotics has to do with animal agriculture’s connection to the environment and human health.

KFC supplier Tyson Foods Inc (TSN.N) did not comment. Other U.S. chicken producers that have supplied Yum either declined to comment or could not be reached. It’s not known who KFC’s biggest supplier is or how many chickens KFC buys a year.

In 2012, Chinese media reports about excessive antibiotic use by a few KFC chicken farmers hammered sales there. The country has more than 4,800 KFC restaurants and accounted for nearly half of Yum’s 2014 operating profit. In response, Yum dropped some 1,000 small poultry farmers from its supply chain and launched a public relations campaign to reassure diners about the quality and safety of its food.

Yum operates separate supply chains in China and United States. While antibiotics have made for big headlines in China, the issue also has surfaced at home.

A Reuters investigation last year found that KFC supplier Koch Foods Inc from November 2011 to July 2014 had given some of its flocks antibiotics critical to fighting human infections, even though its website stated otherwise.

The Chicago-based chicken producer changed the language on its website after questions from Reuters about its use of virginiamycin, an antibiotic included in a class considered “highly important” to fighting infections in humans. At the time, Koch said it has no plans to discontinue the use of virginiamycin, which it says may be used to prevent a common intestinal infection in chicken.

Koch did not respond to interview requests for this story.

KFC US said at the time that its “supply partners must adhere to our strict standards and specifications, which in some cases are more stringent than the FDA’s regulations.” It declined to comment this week.-Reuters