Fast food chains: I’m not lovin’ it!
Jane Turner and Tim Hunt discover whether there are any ethics on the menus?
What’s in this guide?
We have ranked seven of the biggest fast food chains in the UK, covering burger, chicken, pizza and sandwich takeaways. We have not covered brands like Nando’s where the focus is table service – see the Restaurant guide for these sort of outlets. And see the Coffee Shops guide for takeaways like Starbucks and Pret where you can get sandwiches but where the prime focus is coffee.
In terms of company-wide policies, the fast food industry performs pretty poorly with worst ratings for all companies for supply chain management. Most companies, apart from Greggs and McDonald’s, also get worst for environmental reporting.
A US study last year showed that the fast food sector had by far the weakest commitments to use palm oil that is deforestation-free, peat-free, and traceably- and transparently-sourced. And they are all likely to use GM ingredients or GM animal feed somewhere in their global supply chains.
Below we go into details about other areas where fast food chains perform poorly: animal welfare, wages and workers’ rights, health, and marketing to children. Plus one area they do well in – tax avoidance!
We have also surveyed the brands to see what, if any, sustainable products they sell in the UK.
85% of fast food chains don't offer any organic options
80% of fast food chains don't offer any Fairtrade options
40% of fast food chains don't offer any free-range options
70% of fast food chains don't offer any sustainably-sourced fish
Not one fast food chain offers any free range or organic meat or poultry, products which are at the very heart of their menus.
Animal welfare on the menu?
Fast food companies are particularly unimpressive in terms of animal welfare and for companies that make the bulk of their money from meat and poultry this is clearly unacceptable. The only progress being made by a few companies is in the use of free-range eggs – see the ‘Sustainability on the menu’ table above.
An annual review of how the world’s leading food companies are managing and reporting their farm animal welfare practices was recently published by farm animal welfare organisations Compassion in World Farming and World Animal Protection. The companies were ranked from Tier 1 (indicating companies are taking a leadership position), down to Tier 6 (where animal welfare does not appear to be on the business agenda). Here’s how the companies in this guide fared:
- Tier 1 – no fast food chains
- Tier 2 – McDonald’s
- Tier 3 – Subway
- Tier 4 – YUM! Brands (KFC)
- Tier 5 – Domino’s, Greggs
- Tier 6 – Burger King
(Wimpy was not included in the 80 companies evaluated.)
Super size me
We spend £30 billion on takeaways and fast food every year in the UK, a third of our entire food budget. Globally, the figure is £389 billion.
Our addiction to fast food does appear to be a growing problem – a study by the British Medical Journal in March 2014 revealed that people are nearly twice as likely to be obese if they live or work in close proximity to a takeaway. Aside from obesity, the health impacts of the regular eating of fast food are legendary and include diabetes and cardiovascular conditions. The food is high in calories, salt, fat, sugar, additives and preservatives.
This fact was graphically demonstrated in 2003. Morgan Spurlock’s ‘Super Size Me’ extreme experiment depicted the health impacts of fast food by eating three McDonald’s meals a day for 30 days consuming, on average, 5,000 kcal a day. As a result, the then-32-year-old Spurlock gained 24½ lbs. (11.1 kg), a 13% body mass increase, increased his cholesterol to 230 mg/dL, and experienced mood swings, sexual dysfunction, and fat accumulation in his liver. It took Spurlock fourteen months to lose the weight gained from his experiment using a vegan diet supervised by his then girlfriend, a chef who specialises in gourmet vegan dishes.
Marketing to kids
The marketing of fast food to kids and teenagers, using for example ‘Happy Meals’, toys, websites, sports people, celebrities and music videos, is of particular concern. Eric Schlosser’s book, ‘Fast Food Nation’ explains how McDonald’s modelled its marketing tactics on The Walt Disney Company, which inspired the creation of advertising icons such as Ronald McDonald. The aim was, of course, brand loyalty that would persist through to adulthood.
The World Health Organization has recognised the links between fast food marketing and our children’s failing health, recommending that governments implement tighter regulations on fast food advertising to kids. In the UK, adverts for food and drink products high in fat, sugar and salt are not allowed to be shown in and around programmes specifically made for children.
But McDonald’s, for example, is still allowed to advertise its healthier Happy Meals featuring fruit bags and carrot sticks and organic milk. However a study by Liverpool University found that kids are still choosing fries and a soft drink when they go to McDonald’s. The ‘healthier’ advertising, though ostensibly a good thing, just seems to be promoting a general preference for fast food. What a happy coincidence for the fast food industry!
Fast food brands exploit loopholes in these advertising regulations, by airing their adverts during shows that are popular with children but are classified as adult shows, like The Simpsons and X Factor.
Campaigners such as the Children’s Food Campaign and the British Heart Foundation are calling for a ban on all advertising of junk food until 9pm. Sign the petition.
In a video launched in 2014 by the US advocacy group Corporate Accountability International (CAI), children take McDonald’s and other fast-food companies to task for marketing to them. The video, ‘Kids Not Lovin’ It,’ features youngsters from around the country and stars Hannah Robertson, a 9-year-old girl who received national attention when she attended a McDonald’s shareholder meeting and asked Don Thompson, then the company’s chief executive, to stop trying to “trick kids.”
CAI launched an email campaign in 2015 calling on McDonald’s to retire Ronald McDonald and end junk food marketing to children for good. Send an email from www.stopcorporateabuse.org/take-action.
Zero-hours contracts in the UK
Described as “exploitative” by unions and campaigners, ‘zero-hours’ contracts are not defined in legislation and so remain unregulated outside the normal work time directives. They are a type of employment contract between an employer and a worker, in which the employer is not obliged to provide the worker with any minimum working hours. Some zero-hours contracts oblige workers to take the shifts they are offered meaning they are unable to take on other jobs, while sick pay is often not included. More than 700,000 people in the UK are currently on them.
Here’s how the fast food chains fared:
- McDonald’s – the biggest zero-hours employer in the private sector. Employs 90% of its entire workforce in Britain, or 82,800 staff, on zero hour contracts.
- Burger King – all 20,000 workers in its restaurants on zero-hour contracts.
- Domino’s – 90% of staff, or more than 20,000 employees on zero-hours contracts.
- Subway – zero-hours contracts used by the largest Subway franchise, Made To Order, which runs more than 100 Subways in Greater Manchester and Yorkshire.13 Maybe other franchises too.
- KFC – used in “a small number” of franchises.15 75% of KFCs in the UK are franchises.
- Greggs – have said they don’t use them.
- Wimpy – no information.
Fast food protests sweep the USA
Over the past 12 months the fast food industry has been hit by a wave of strikes across the United States.
Workers, under the banner ‘Fight for $15’, have walked out of restaurants (including Burger King and McDonald’s) in 190 cities as a grassroots campaign for a decent level of pay and the right to unionise without retaliation gathers momentum.
Fast food workers across the US complain that the wages they receive (the current federal minimum wage of $7.25 per hour (£4.75)) are not enough to live on. Many need government handouts in the form of Medicare and food stamps despite working long hours.
The campaign has huge backing from unions and even President Obama lent his voice to the cause: “All across the country right now there’s a national movement going on made up of fast-food workers organising to lift wages so they can provide for their families with pride and dignity.”
In the UK, the Bakers, Food and Allied Workers Union hosted a delegation of US fast food workers to share news of their strike movement for $15/hr (equivalent to about £10), and they will be raising the demand for £10/hr in the UK on the global day of action for Fast Food Rights on 15th April 2015.
The Fight for $15 campaign has continued in the face of repression from the government and alleged intimidation from managers at fast food outlets with McDonald’s at the centre of numerous controversies.
In May 2014, over 100 people were arrested at a peaceful protest that shut down the McDonald’s HQ in Illinois. In September, over 500 striking workers were arrested in cities across the country as they joined a one day strike and picketed various restaurants including McDonald’s.
In July, a special report from Bloomberg found that McDonald’s fired nine workers in New York between November 2012 and April 2014 for joining unions and helping organise workers. Workers also faced suspension and reduced working hours for being involved in forming unions.
Based on these reports, in December 2014 the US National Labor Relations Board issued 13 complaints containing dozens of charges against McDonald’s and many of its franchisees for violating workers’ rights to press for better pay and working conditions.
The New York Times reported that alleged violations involved actions against workers who supported the protests. These included threats, surveillance, interrogations, firings, discriminatory discipline, reduced hours and excessive restrictions on conversation about unions or work conditions. Managers were also accused of offering promotions in exchange for giving up the fight.19
Importantly for the striking workers and the wider campaign, the NLR Board held McDonald’s jointly responsible with the franchisees. This undermines McDonald’s long held claim that they bear no responsibility for workers’ rights which they say are the sole responsibility of the franchisees.
The Board’s ruling stated that McDonald’s, “through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of our Act.”
Mary Kay Henry, the head of Service Employees International Union told Business Week, “The franchisee relationship is a smokescreen so corporations don’t have to take responsibility for paying more. Every detail of food preparation is centralized. With that level of coordination, workers believe that corporations could figure out how to pay them more.”
Litigation based on the Board’s reported violations was being heard when Ethical Consumer went to press in April 2015.
The company faced further litigation in January 2015 when ten people filed a law suit against them in a US court over racial discrimination. Ten former McDonald’s workers in Virginia claim that supervisors sacked them because the stores had “too many black people”. The employees say they overheard their supervisors talk about the “need to get the ghetto out of the store”, and “get rid of the niggers and the Mexicans”. The action was taken jointly against McDonald’s and the franchise owner.
The decision by the National Labor Relations Board to hold McDonald’s equally responsible in the suit is likely to impact on the these proceedings. One of the plaintiffs, Pamela Marable, told the Guardian, “McDonald’s closely monitors everything we do, from the speed of the drive-thru line to the way we smile and fold customers’ bags – but when we try to tell the company that we’re facing discrimination, they ignore us and say that it’s not their problem.”
We gave all the companies a mark in the Workers’ Rights column for low pay because it is endemic in the industry and none of them were found to be paying a Living Wage.
Tax avoidance on the menu at McDonald’s
A damning report has revealed that McDonald’s avoided over €1 billion in tax between 2009 and 2013.
The report outlines how the company moved its European headquarters from the UK to Switzerland and used intra-group royalty payments, channelled into a tiny Luxembourg-based subsidiary with a Swiss branch, to avoid paying the full rate of corporation tax in a number of European countries including the UK, Spain and Italy.
The ‘Unhappy Meal’ report is co-authored by a coalition of European and American trade unions (EPSU, EFFAT, and SEIU), representing 15 million workers in different sectors of the economy across almost 40 countries, as well as UK-based anti-poverty campaign group War on Want.
Low tax rate
According to the company’s accounts, between 2009 and 2013, the Luxembourg-based structure, which employs just 13 people, registered a revenue of €3.7 billion, on which it paid a meagre €16 million in tax.
Filings in Luxembourg show that in 2013 alone McD Europe Franchising Sarl, received over $1 billion in fees from franchisees and McDonald’s subsidiaries across Europe.
In addition it paid tax of just 1.4 percent on profits of $288 million in 2013 – well below the headline Luxembourg corporate tax rate of around 29 percent.
“It is shameful to see that a multi-billion Euro company, that pays low wages to its workforce, still seeks to avoid its responsibility to pay its fair share of much needed taxes to finance public services we all rely on. Rather than supersizing profits and minimising taxes, McDonald’s should change its recipes to ensure that Corporate Citizenship is at the core of its menu,” said EPSU General Secretary Jan Willem Goudriaan.
In the UK
In the UK the company is thought to have avoided around £75 million in tax. The company has disclosed that between 2009 and 2013 it paid £294.2 million in franchise rights fees offshore.
The researchers say that if these franchise rights fees were subject to taxation in the UK at the prevailing corporate tax rate, McDonald’s would owe an additional £75.7 million in unpaid taxes over the past five years.
However they go on to say that:
“... the UK has been significantly impacted by the decision of McDonald’s management to relocate the company’s European headquarters to Switzerland in 2009. If McDonald’s had maintained its European headquarters in London and paid UK tax on royalties earned from its European subsidiaries, the royalties that have since been received by McD Europe Franchising Sàrl would have been subject to a much higher rate of tax. If all of the royalties actually received by McD Europe Franchising Sàrl between 2009 and 2013 were taxed in the UK instead, McDonald’s would have owed up to £818.7 million in tax.”
McDonald’s has faced widespread criticism in Europe and globally for the low wages and poor working conditions at its restaurants.
In the UK, for example, workers have protested McDonald’s practice of “zero-hours contracts”, which leaves workers without any guarantee of regular work or stable income.
The company’s low wages have also been criticised for imposing substantial costs on taxpayers, as many McDonald’s workers are forced to rely on public assistance, such as working tax credits, to meet basic living expenses.
The report’s authors are now calling on the European Commission and national tax authorities, as well as the European Parliament’s newly formed Special Committee on Tax Ruling, to look closely into McDonald’s tax practices and take appropriate measures.
McDonald’s European office had no immediate response when asked for comment by Reuters. Previously, the company said it followed tax rules in the different jurisdictions where it operates.
Download the full ‘Unhappy meal’ report
The McLibel Trial
The McLibel Trial is the landmark British ‘David v Goliath’ court case between McDonald’s and a former postman and a gardener from London (Dave Morris and Helen Steel), dubbed the McLibel Two. They defended themselves in court as they could not afford to hire any solicitors or barristers. The two were members of the small activist group London Greenpeace, which produced a six-sided factsheet in 1986 called ‘What’s wrong with McDonald’s’ as a result of which McDonald’s served libel writs on Helen and Dave in 1990.
The court case was widely believed to have been a public relations disaster for McDonald’s, which ultimately won the libel battle (on some counts only), but it spent millions on lawyers. The McLibel Trial was important because it meant that the libel laws became effectively unusable for corporations to use as ‘bully-boy’ tactics against ethical criticism from civil society.
The trial ran for two and a half years and became the longest ever English trial. The defendants were denied legal aid and their right to a jury, so the whole trial was heard by a single Judge, Mr Justice Bell. He delivered his verdict in June 1997.
The verdict was devastating for McDonald’s. The judge ruled that they ‘exploit children’ with their advertising, produce ‘misleading’ advertising, were ‘culpably responsible’ for cruelty to animals, were ‘antipathetic’ to unionisation and paid their workers low wages. But Helen and Dave failed to prove all the points and so the Judge ruled that they had libelled McDonald’s and should pay £60,000 damages.
They refused and McDonald’s knew better than to pursue it. In March 1999 the Court of Appeal made further rulings that it was fair comment to say that McDonald’s employees worldwide “do badly in terms of pay and conditions”, and true that “if one eats enough McDonald’s food, one’s diet may well become high in fat etc., with the very real risk of heart disease.”
As a result of the court case, the Anti-McDonald’s campaign mushroomed, the press coverage increased exponentially, and the McSpotlight website was born.
The legal controversy continued. The McLibel Two took the British Government to the European Court of Human Rights to defend the public’s right to criticise multinationals, claiming UK libel laws are oppressive and unfair and that they were denied a fair trial. In 2005, the court ruled in favour of Helen and Dave: the case had breached their rights to freedom of expression and a fair trial.
In 2013, it was revealed that an undercover police officer, Bob Lambert, had
co-written the ‘libellous’ factsheet. That information was not revealed during the court case.
McDonald’s is the largest burger chain in the UK with around 1200 restaurants, half of which are run by franchisees. Tired of being held up as an example of corporate evil and greed, the fast food chain has been hitting out at critics with a series of environmental and social initiatives designed to prove that it cares. For example, it has revamped its menus and now sells Rainforest Alliance coffee and organic milk. It has also rebranded its stores, literally turning them green. But have McDonald’s revamped their ethical performance beyond the cosmetic?
The company scores worst across most of the policy areas that Ethical Consumer rates (i.e. tax avoidance and supply chain management). It also had an inadequate policy on palm oil and GMO.
In addition to the protests the company has recently faced in the US (see above) it has also come under fire in Brazil. In February this year the biggest operator of franchises, Arcos Dorados, faced legal action for alleged violations under Brazil’s labour code. Complaints against the company included unwholesome and unsanitary working conditions, time-clock fraud and failure to pay mandatory unemployment and retirement insurance. The suit further alleged that Arcos paid below legal or contractual minimum wages, forced double-shift work without breaks, forced workers to take in-restaurant lunch breaks with employer-supplied food and failed to make mandatory severance payments.
YUM! Brands is the largest restaurant company in the world. It owns KFC, Pizza Hut (see Restaurants guide) and Taco Bell.
A 2012 Greenpeace report revealed how KFC’s chicken buckets and other packaging were made from unsustainable rainforest fibre, supplied by APP which sourced Indonesian rainforest logs from the habitat of the endangered Sumatran tiger. KFC said about its packaging: “100% is either recycled or from certified sustainable sources.” And it denied using APP as a supplier. But independent fibre testing of KFC packaging in 2011 and 2012 for Greenpeace repeatedly found the presence of mixed tropical hardwood.
Three years after the campaign started, APP said it would stop cutting down Indonesian rainforests and YUM! Brands released a new set of commitments which could make the paper and packaging it uses much more rainforest-friendly.
Animal rights campaigners PETA have been running a boycott campaign against KFC since 2001 over the treatment of chickens in its supply chain. Undercover investigations have found that KFC suppliers cram birds into huge waste-filled factories, breed and drug them to grow so large that they can’t even walk, and often break their wings and legs. At slaughter, the birds’ throats are slit and they are dropped into tanks of scalding-hot water – often while they are still conscious. Frustrated farm and slaughterhouse workers handle live birds, and many of the animals end up being sadistically abused.
KFC’s own animal welfare advisers have asked the company to take steps to eliminate these abuses, but KFC refuses to do so. Many advisers have now resigned in frustration.
Burger King began in 1953 as Insta-Burger King, a Florida-based restaurant chain. After years of losing money in the 1980s and 90s, in late 2010, global investment firm 3G Capital of Brazil acquired a majority stake in Burger King.
3G Capital was founded by three Brazilian billionaires and is incorporated in the Cayman Islands, a tax haven.24 3G Capital also jointly owns iconic food brand HJ Heinz with billionaire investor Warren Buffett’s Berkshire Hathaway.
The opening of a Burger King location in Ma’aleh Adumim, an Israeli settlement in the Israeli-occupied Palestinian territories, led to a consumer boycott in 1999. BK quickly pulled the franchise license. In July 2013 it was announced that Burger King is attempting to return to Israel.
In August 2014, people flooded Burger King’s Facebook page with threats of a boycott after the company announced talks to merge with Canadian coffee and doughnut chain Tim Hortons. The combined company would be headquartered in Canada.
Burger King was accused of tax inversion, where a bigger company buys a smaller foreign firm in a country with a lower tax rate, renounces its corporate citizenship and then reincorporates in the other nation. Politicians and pundits have said the moves amount to little more than unpatriotic ploys to avoid paying taxes. The corporate tax rate in the U.S. is 35 percent, the highest in the world. Canada’s is about 15 percent.
The deal would save Burger King an estimated $400 million to $1.2 billion in U.S. taxes between 2015 and 2018, Americans for Tax Fairness said. The deal was completed in December 2014.
The Domino’s Pizza brand is owned by a US company but it operates in the UK through franchise company Domino’s Pizza Group PLC which pays the US company for the right to use the brand name. Domino’s Pizza is the number two pizza chain in the world behind Pizza Hut (see Restaurants guide).
The company scores worst for its environmental and supply chain policies, has no commitment to use sustainable palm oil and has no company-wide policy on GMOs.
Subway is owned by private company Doctor Associates Inc. based in the US. All its outlets are franchises. On the table it scores worst for both its supply chain management and environmental policies and also has poor reporting on palm oil usage and GMO use.
Last year, the LA Times exposed the poor working conditions of Mexican farm labourers in the Subway supply chain. Their investigation found that labourers worked long hours and complained that they had been told they could send money home to support families but this had been denied. Wages were withheld to prevent workers from leaving during peak harvest periods.
Workers were trapped for months in rat-infested camps, often without beds and sometimes without functioning toilets or a reliable water supply.
They often went into debt paying inflated prices for necessities at company stores. Some were reduced to scavenging for food when their credit was cut off. They also reported that it’s common for labourers to head home penniless at the end of a harvest.
Subway said in a statement at the time: “We will use this opportunity to reinforce our Code of Conduct with our suppliers.” The code says suppliers must ensure that workers “are fairly compensated and are not exploited in any way.”
Greggs is the UK’s leading bakery food-on-the-go retailer with its infamous Greggs pasty. It started as a small bakery on Gosforth High Street in 1951. Today, Greggs has almost 1,700 shops in the UK, that’s 500 more outlets than McDonald’s.
It was criticised in 2012 for using workfare. The company claims not to use it any more but chooses not to be critical of the scheme. Workfare is a scheme whereby Jobseeker’s Allowance claimants who haven’t found a job once they have been through a work programme have to do an unpaid (save for expenses) job in order to receive their benefits.
It does, however, employ unpaid workers on its own 4-week work experience scheme.
Greggs only uses free range eggs, and 70% of its palm oil is from sustainable sources. It was the only fast food company to say it didn’t use GM ingredients and the only one to sell Fairtrade tea and coffee (as opposed to Rainforest Alliance like McDonald’s).
Wimpy is an iconic British brand named after a hamburger-enamoured character in the Popeye comics and cartoons. In 1954, the first ‘Wimpy Bar’ was established at the Lyons Corner House in Coventry Street, London. Originally the bar was a special fast-food section within the more traditional Corner House restaurants, but the success soon led to the establishment of separate Wimpy restaurants serving only hamburger-based meals. By the late 1980s, Wimpy was beginning to lose ground to McDonald’s, which had opened their first UK restaurant in 1974. Wimpy UK eventually ended up in the hands of Famous Brands, which also owns the franchise in South Africa. There are 113 Wimpys, mainly in London. Wimpy is the only major fast food chain that offers Quorn veggie burgers on its menu.
Famous Brands is a South African company that specialises in fast food and restaurant franchises in Africa and the UK. There was no corporate responsibility information addressing issues such as sustainability, environmental impact, supply chain management or animal welfare on its website.
Independent fast food restaurants
There are loads of these in the UK and they may be a better option than the chains. But check for any sustainability on their menus – is anything free range, organic or Fairtrade etc? For example, in London a not-for-profit community chicken shop, Chicken Town, is due to open in September and will serve free range chicken.