Investors Drive Market Forces For Progress On Antibiotics In Factory Animal Farming

The meat and poultry industries have made significant progress in tackling antibiotic resistance over the past four years, encouraged by persistent shareholder engagement on this critical issue. 

The overuse of antibiotics in humans and animals is causing previously controlled diseases to become 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. As You Sow has been working with food companies to dramatically reduce or eliminate the use of antibiotics used in animals raised for food. 

#AntibioticResistance is one of the greatest threats to mankind. But thanks to pressure from shareholders, the meat and poultry industry is making great strides in reducing the use of #antibiotics in animal #agriculture. @AsYouSow #ProxyPreview #Superbugs

Animal agriculture is a major contributor to the problem of antibiotic resistance. On industrial farms, it has been common practice to give small doses of antibiotics to healthy animals to make them grow faster or to prevent them from falling ill from poor diet and crowded, unsanitary conditions. In 2017, new FDA guidelines banned the routine use of these drugs for growth promotion, resulting in a drop in sales of antibiotics for use in animals; but a major loophole remains that allows farmers to routinely administer antibiotics for preventive purposes. 

A growing number of companies now address the problem by restricting the use of medically important antibiotics in animals further than government guidelines demand, recognizing the laws as insufficient. The chicken industry, in particular, has come a long way. Following pressure from investors and other groups, in 2018, Sanderson Farms finally announced a policy to eliminate the use of medically important antibiotics in its operations, becoming the last of the four largest chicken producers in the country to do so.

The fast food and restaurant sectors remain major targets of investor advocacy as investors continue to highlight the opportunity to win customers by providing higher standards for meat, and to point out the reputational and market risks for not doing so. The restaurant and fast food sectors represent the majority of engagements for the Farm Animal Investment Risk & Return Network (FAIRR), a global initiative working on food and environmental concerns. 

Investors have engaged with McDonald’s for several years, beginning with a shareholder resolution filed in 2016 that proponents withdrew after the company agreed to eliminate chicken raised with medically important antibiotics from its supply chains. In 2018, the company made headlines by announcing a comprehensive policy for the use of antibiotics in its beef supply chains; the announcement followed investor pressure and the publication of the fourth Chain Reaction scorecard, which highlighted the failures of fast food chains to restrict the use of antibiotics in beef. McDonald’s is the largest single purchaser of beef in the world; the company’s action is expected to create a wave of change in the industry.

Successful shareholder engagement also has encouraged recent progress by Brinker International (parent of Chili’s and Maggiano’s restaurants), Dine Brands Global (parent of Applebee’s and IHOP), and Denny’s.  This effort continues to gain momentum and we see more change coming ahead

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Christy Spees
Environmental Health Program Manager, As You Sow