McDonald's Labeling Scheme: Not Lovin' It
Last week, McDonald's announced its latest attempt to mutate into a responsible corporate citizen. Starting in 2006, the fast food behemoth promises to place nutrition information on the 'packaging' of most menu items.
Placing aside corporate spin, questions loom large as to actual impact and underlying motivation. Upon closer inspection, the move is a thinly veiled attempt at deflecting government intervention that could have even greater impact.
How effective is seeing the calories on the wrapper of a cheeseburger you've already purchased? Imagine if at the grocery store, after buying all your food, along with your change you're handed the nutrition facts labels from each of the items you just bought. It's no wonder the law requiring nutrition labeling on products sold in stores wasn't written that way. Doing so would defeat the purpose of educating consumers to better inform their purchases.
The McDonald's press release calls the move "the latest transparency initiative in the company's 30-year record of providing nutrition information to help customers make informed choices." Now that's creative rewriting of history. Let's go back precisely 30 years to when McDonald's fought off a federal proposal to require nutrition labeling on packaging. Ironically, the company used the same arguments that consumer groups now point to as the limitations of this approach.
For example, a 1975 letter from McDonald's to the Food and Drug Administration reads:
"[Information on packaging] would result in only post-purchase communication to the customer. [McDonald's proposed wall mounting] would provide all customers the nutritional information prior to consummating a purchase."
McDonald's won that battle.
History repeated itself 15 years later when McDonald's (along with the rest of the restaurant industry) successfully got itself exempt from the updated "Nutrition Facts" labeling requirements for packaged food. According to Michael Jacobson, executive director of the Center for Science in the Public Interest (CSPI), the main consumer group behind the legislation, if restaurants had been covered in 1990, that bill never would have passed. Politics by ultimatum works wonders.
That's why consumer groups such as CSPI have been lobbying for the past several years to pass new laws requiring restaurant chains to place basic nutrition information on menus and menu boards, to fill in this gaping hole in consumer information. With Americans eating half of all meals outside the home, why shouldn't chain restaurants be required to provide calorie, fat, and sodium content on menus and menu boards, where it would have the most impact? Marketers call such placement at the "point-of-purchase" and recognize that it's the most effective way of influencing consumer behavior with information.
Yet the National Restaurant Association, whose members include thousands of McDonald's franchises, has been fighting tooth and nail against both federal and state bills, which explains why none of them has passed so far. When asked why the fast food chain won't go further and put the information on menu boards, McDonald's CEO Jim Skinner claimed that it would be too complex and slow down service.
But Maine Representative Sean Faircloth doesn't buy that argument. Restaurant lobbyists have twice killed his bill to require the posting of calories on menu boards. Why so much resistance from restaurant chains? "Because they'e worried that it would work," Faircloth says. "That people would change their behavior based on the information. And fast food companies don't like the idea of people having information so they can make informed choices," he said.
That similar legislation is currently pending in several other states in part explains the timing of McDonald's announcement. If lawmakers think that corporations are improving policy on their own, they may deem these bills unnecessary. However, we have plenty of experience to know that voluntary, self-regulatory measures ultimately fail.
Last year, Ruby Tuesday received much praise from consumer groups for starting to print calorie information on its menus. But just a few short months later, the company rescinded the policy for reasons that are unclear. Depending on who you ask, it was either too expensive to maintain or sales of the company's unhealthy items fell; in other words, it worked. Either way, access to more information may be good for public health, but it can also be bad for business. That's why laws are needed to require companies to change their practices. As soon as any voluntary measure negatively impacts a corporation's bottom line, the policy soon becomes a fleeting moment in history.
Despite their claims of corporate responsibility, companies such as McDonald's don't act in the interest of consumers, but rather will do whatever is politically expedient in that particular moment. Three decades ago, the threat was government-regulated packaged labeling, and McDonald's fought that off successfully. Now the threat is menu labeling, so the company is attempting to deflect attention by providing something far less effective: labels on wrappers.
CEO Skinner says the company is "putting the information customers need literally into their hands," which works out well because by then, the money is already in McDonald's hands.
© 2005 Michele Simon