Progress Made on Overuse of Antibiotics in Chicken Industry, More Work Needed in Retail Sector, and Beef and Pork Industries

As we move into the New Year, we are taking a moment to reflect on the progress and challenges of 2018 in our corporate engagements to end the overuse of antibiotics in animal farming.

The World Health Organization calls antibiotic resistance “one of the biggest threats to global health, food security, and development today.” Antibiotic resistance threatens our ability to treat infections such as pneumonia, tuberculosis, and salmonellosis, among others; the result is that previously controllable diseases are becoming more and more fatal. If nothing is done to address this problem, antibiotic resistance could cause 300 million premature deaths and up to $100 trillion in global economic damage by 2050.

chicken_farm.jpg

One of the biggest contributors to antibiotic resistance is the overuse and misuse of antibiotics in animal agriculture. Factory farming of animals creates overcrowded and unsanitary conditions but, instead of improving animal welfare practices to maintain animal health, many farmers deliver preventative antibiotics to reduce the frequency with which animals fall sick. An estimated 70% of all antibiotics sold in the U.S. are used for animal production, and many of these drugs are being given preventively to animals that do not have a diagnosed illness. When antibiotics are overused in this way, disease-causing bacteria become resistant; and those resistant bacteria can easily spread through the environment.

Federal regulations around antibiotics use in farm animals have been continuously criticized by scientists and advocacy groups for falling short of addressing the problem. Initially published in 2013, the Food and Drug Administration’s (FDA) guidance on antibiotic use in animal agriculture became fully implemented in January of 2017. The guidance provides that companies should not use antibiotics for the purpose of growth promotion and that veterinary oversight be used in the administration of antibiotics. However, a major “loophole” remains: The guidance allows for routine, frequent use of medically important antibiotics if used for the prevention of disease. This use is incredibly common and is where voluntary action from corporations can make the biggest impact.

The problem of antibiotic resistance can be significantly reduced by limiting the market for meat raised with medically important antibiotics. Since 2015, As You Sow has been engaging major meat producers and fast food and restaurant chains to encourage responsibility in the use of antibiotics in companies’ meat operations and meat supply chains.

As You Sow Engagements

When As You Sow began engaging companies on the issue of antibiotics, the sale of antibiotic drugs in the U.S. had reached an all-time high. The animal agriculture industry had just begun to respond. A few pioneering fast food and fast casual dining chains (Chipotle, Panera, Chick-Fil-A) were leading the way in committing to purchase meat raised without unnecessary antibiotics and they were reaping the benefits of their commitments. Early in 2015, McDonald’s created a wave of momentum for fast food companies to meet consumer demands with its announcement that it would serve only chicken raised without medically important antibiotics in the U.S. by the end of 2017 (a goal the company met early, in 2016). As shareholder advocates, we saw this as an important opportunity to move similar companies to make the same shift to protect public health and benefit from the long-term value they would see in beating their competitors to adapt.

Since we filed our first resolution on antibiotics in 2016, which was with Wendy’s, the industry has made significant progress. As of October 2018, 18 of the top 25 fast food and fast casual chains in the U.S. have established policies to reduce the use of antibiotics in at least one meat category (for most, only in chicken). Most of these companies have committed to reduce or end the use of medically important antibiotics. It is worth noting that far fewer have agreed to completely end their use of all antibiotics (instead relying on drugs only used in animals).

This year, we focused on engaging laggard companies that had yet to establish antibiotics policies for chicken and fostering leadership on antibiotics in beef.

We saw significant progress in the fast food and restaurant sector:

  • In August, our engagement with Brinker International, parent company of Chili’s and Maggiano’s restaurants, led the company to commit to publishing a policy eliminating chicken raised with medically important antibiotics from its supply chain.

  • At Denny’s we presented a shareholder resolution in May of 2018 asking the company to establish a policy prohibiting all use of medically important antibiotics in its meat and poultry supply chains; the company has been responsive to our engagement and we have decided not to file another resolution for the 2019 season as we understand that the company is making meaningful progress on this issue.

  • McDonald’s made big news this December with an announcement that established a policy restricting medically important antibiotics in the beef it purchases. Given the magnitude of McDonald’s business (the company is the largest single purchaser of beef in the U.S.), this leading policy will have a significant impact on the beef industry. Further, we expect it will set a standard for other fast food and fast casual chains to follow suit.

In a late stage reversal, the last major producer of chicken has also changed its ways:

  • Sanderson Farms, Inc., one of the nation’s biggest producers of chicken, has been a hold out on the issue of antibiotics in recent years. We filed shareholder resolutions with the company the past three years. In November of this year, we were pleasantly surprised when Sanderson announced that it would eliminate all use of medically important antibiotics in its operations. This important announcement will help ensure that more restaurants and grocery stores will be selling chicken free of medically important antibiotics.

As our first engagement of its kind, this year we began working with a major retailer:

  • Following our engagement this year with Costco Wholesale Corporation, in December the Company updated its animal welfare standards to include a commitment to begin monitoring, testing, and enforcing existing FDA guidelines for the responsible use of antibiotics by meat suppliers. While the company failed to create a policy that reduces or disallows the use of medically important antibiotics for the prevention of disease, we see this commitment as a step towards the company taking more accountability for its meat supply chain. We hope this will lead Costco to make better informed and more responsible purchasing decisions in the future and end its sale of meats raised with antibiotics, especially medically important antibiotics. Historically, the retail sector as a whole has been very hands off in influencing supplier practices (with the exception of Whole Foods Market, and perhaps smaller, lesser known retailers). While Costco’s action does not change its own standards for the use of antibiotics in the meats it sells, we support the company’s willingness to get involved in this issue, and hope this is a first step to finally addressing medically important antibiotic use in the meats it sells. In particular, as Costco begins its own chicken production operation this year, we will be looking for the company to quickly commit to prohibiting all use of medically important antibiotics in the chickens raised by farmers with whom it contracts.

Moving into 2019 and beyond, we continue to set big goals. Our vision is to pursue a food system that is good for business, good for the planet, and good for the health and well-being of animals and the public. Beef and pork producers still have yet to meaningfully address the problem of antibiotics resistance in their meat. We need to see that change. In order to protect long-term sustainability, businesses that rely on productive animal agriculture must get ahead of regulations and adapt to the growing consumer demand for safe and responsibly raised meat.

In particular, we will be focused on engaging major fast food, restaurant, and retail companies to set policies for their beef and pork supply chains that disallow the use of medically important antibiotics for the prevention of disease. Given that the vast majority of antibiotics are used in the beef and pork industries, shareholders will continue to demand an end to the unacceptable applications of antibiotics, ultimately halting the public health threat of antibiotic resistance and protecting companies from the reputational, legal, and other risks posed by this urgent issue.