The McDonald's 'Beef Fries' Controversy

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Case Details:

Case Code : BECG017
Case Length : 12 Pages
Period : 1993 - 2001
Pub. Date : 2002
Teaching Note : Available
Organization : McDonald's, Shiv Sena, Vishwa Hindu Parishad (VHP), Bajrang Dal
Industry : Food, Beverages and Tobacco
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Hindus and vegetarians all over the world feel shocked and betrayed by McDonald's deception and ultimate greed."

- Attorney Harish Bharti, on filing the lawsuit against McDonald's, in May 2001.

"These are the ways the fries are made in the US, and we don't have any plans to change."

- Walt Riker, McDonald's spokesperson, in May 2001.

A Controversy Erupts

In May 2001, a class action lawsuit¹ was filed against the world's largest fast-food chain McDonald's, in Seattle, US. The lawsuit alleged that the company had, for over a decade, duped vegetarian customers into eating French fries² that contained beef extracts.

The lawsuit followed a spate of media reports detailing how the French fries served at McDonald's were falsely promoted as being '100% vegetarian.' Although McDonald's initially declined to comment on the issue, the company issued a 'conditional apology,' admitting to using beef flavoring in the fries. The furore over the matter seemed to be settling down, when to McDonald's horror, some of its restaurants in India were vandalized. Activists of Hindu fundamentalist groups - the Shiv Sena, the Vishwa Hindu Parishad (VHP) and the Bajrang Dal, staged a demonstration in front of the McDonald's head office in Delhi protesting the alleged use of beef flavouring. They submitted a memorandum to the Prime Minister, demanding the closure of all McDonald's outlets in the country.

Activists also staged protests in front of McDonald's restaurants in south Mumbai and Thane. Mobs ransacked the outlet at Thane, broke the glass panes and smeared the McDonald's mascot Ronald with cow dung.

About 30 people were arrested and later let off on bail. Company officials estimated the loss to the outlet at Rs 2 million. Officials at McDonald's India quickly announced that the vegetarian products served in India did not have any non-vegetarian content (Refer Exhibit I for details).

However, despite this reassurance, the anti-McDonald's wave refused to die down. Meanwhile, more cases were being filed against McDonald's - this time in California, US and Canada. It seemed certain that the company would have to shell out millions of dollars to settle the class action lawsuit representing the 1 million US based Hindus and 15 million other vegetarians...

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1] A class-action suit is a suit filed to protect the interests of group of individuals who are affected or may be affected by a perceived fraud or misconduct of a similar nature. The number of people could be as few as under 10 to millions. Typically, class action suits in the US drag on for years and very often parties settle out of court within the first year of filing.

2] Thinly sliced, finger-sized pieces of potato, deep fried and served with a sprinkling of salt.

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