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Mcdonald’s ‘Beef Fries’ Controversy- ‘Must Read’ Case Study

Two brothers, Richard and Maurice McDonald started Macdonald’s as a drive-in restaurant in California on May 15, 1940. The business generated revenue of $ 200,000 per annum and it further sky-rocketed when the new ‘self-service’ concept was becoming the new trend. Speed, service, and, cleanliness helped Macdonald’s to survive the competition. Several controversies surround them, for the past few decades due to rising health concerns. But Mcdonald’s ‘Beef Fries’ controversy is the biggest of them all.
Founders of McDonald’s: Richard & Maurice McDonald

Two brothers, Richard and Maurice McDonald started Macdonald’s as a drive-in restaurant in California on May 15, 1940. The business generated revenue of $ 200,000 per annum and it further sky-rocketed when the new ‘self-service’ concept was becoming the new trend. Speed, service, and, cleanliness helped Macdonald’s to survive the competition. The business expanded with the franchise system but it did not yield the desired results. Several controversies surround them, for the past few decades due to rising health concerns. But Mcdonald’s ‘Beef Fries’ controversy is the biggest of them all.

Background Note for the McDonald’s ‘Beef Fries’ Controversy

McDonald’s restaurants are located in 120 countries and territories around the world. When combined, all of these serve 68 million customers each day. McDonald’s operates 37,855 restaurants worldwide which employ more than 210,000 people as per an early 2019 survey. Around half of these customers visit US establishments.

In 1990, the company switched to vegetable oil, eliminating the use of animal fat for frying purposes. They undertook this step because the customers were constantly shifting towards healthy eating habits. Also, animal fat was great distress for the Hindu and other vegetarian customers. Earlier in the 1980s and 1970s, McDonald’s had introduced meat-free and beef-free such as chicken, vegetables, and fish burgers. They did it especially to please the vegetarian and Hindu customers.

But the company’s reputation was thrown under the bus in May of 2001 when due to allegations of socially unaccountable conduct. This was due to the questions raised on McDonald’s French fries. The US-French Fries contained a flavor enhancer made of beef extract, which came out, creating chaos. This was great distress for Hindu and vegetarian customers.

Eruption of the Controversy

The controversy erupted when Hitesh Shah, a vegetarian of Indian origin working and living in Los Angeles, approached McDonald’s headquarters to enquire regarding the oil used for cooking French fries. He discovered that in the US, they add natural flavourings made from the beef extract, to the French fries at the factories, while processing.

According to several rumours and news reports, they incorporated the beef flavouring when they switched from animal fat to vegetable oil. So, to add ‘natural’ beef flavouring to the fries during step one (pre-frying) of the preparation process, they took this step.

According to the American Code of Federal Regulations set down by the Food and Drug Administration (FDA), natural flavourings need not be listed individually on product packaging. Hence, the American Legislation sanctioned this practice of McDonald’s. In April of 2001, Shah informed journalists at the newspaper India West about the ‘Beef Fries’. The result was a high-profile article ‘Where’s the beef? It’s in your French fries!’ which went viral. The issue turned out to be explosive for McDonald’s image and reputation. In the first week of May 2001, newspapers and television stations around the world covered the affair with all the details.

Legal Consequence of the McDonald’s Beef Fries Controversy

Harish Bharti: the lawyer who filed the lawsuit against McDonald’s

H.B. Bharti, a Seattle-based lawyer, filed a lawsuit against McDonald’s on behalf of two vegetarians and one Hindu. The Vegetarian Legal Action Network (VLAN) came in the support of the claimants almost immediately. Bharti started receiving tons of phone calls from concerned vegetarians about the same. So, she decided to file a class-action lawsuit on behalf of all fifteen million vegetarians and one million Hindus in the US. The claim amount went up to more than 450 million Euros.  According to the action lawsuit, the ‘Beef Fries’ breached the Washington Consumer Protection Act and caused ‘emotional stress’ among vegetarian and Hindu consumers.

McDonald’s used to claim that all the ingredients of their French Fries were meat-free for more than 10 years. This revelation broke the trust and confidence that consumers had in the brand. As a result, worldwide protests were organized against McDonald’s. Aggressive protests in the Indian capital New Delhi led to widespread protests among the large Hindu communities in England and Fiji. Civil society organizations in India demanded that their government shut down all 28 McDonald’s restaurants.

The Board of McDonald’s attempted to appease the Indian population. They declared in national newspapers that all products, including fries that they sell in Indian McDonald’s restaurants, are vegetarian and always were.

Making up for the ‘Beef Fries’

On 4 May 2001, the Board of McDonald’s openly admitted about the use of the beef extract in the preparation of its fries. However, they also stated that the company had never claimed that the fries were suitable for vegetarians. They further explained that the objective of the switch to vegetable oil in 1990 was partly to increase the nutritional value of its fries and to make it suitable to a low-cholesterol diet which was a rising concern at that time.

Moreover, the company acted completely in accordance with labeling legislation and, as it had announced in 1990, the fries are cooked in 100 percent vegetable oil in all restaurants. In Islamic and Hindu countries, McDonald’s fully observed the (religious) beliefs determining food preparation and consumption. But this statement did not help McDonald’s at all.

Official Apology

So, on 24 May 2001, the Board of McDonald’s issued an apology. They addressed the misunderstanding and ‘confusion’ created by the incomplete information about its French fries served in its American restaurants. They stated that they never intended to mislead the American citizens that their fries were suitable for the vegetarian population. Also, they further promised to review their labelling policy to avoid any similar situations in the future. The apology, however, did not help with the lawsuit that Bharti had filed. McDonald’s had to pay the claimed amount.

The company improved its labeling policy to impart transparency but they refused to alter the recipe for their fries. Also, according to Bharti, it was not the money but the apology and acceptance that mattered. “In the last 100 years, no other mega-corporation has paid millions of dollars and apologized, admitted wrongdoing, and agreed to disclose ingredients which they had been hiding for years. This is an unheard story of result in this country,” she said.

Read: McDonald’s-turnaround of a world leader
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