After Long-Fought Investor Battle, Darden Phases Out Antibiotics in Chicken Supply Chain

After a long-fought battle by activist investor group Green Century Funds, Darden has “finally,” as Green Century said in an emailed statement, announced that the restaurant operator will adopt a policy to phase out the use of antibiotics in its chicken supply chain by 2023.

For three years, Boston-based Green Century, a leading environmental, social and governance (ESG) investor group, has filed antibiotic-use shareholder proposals with Darden, which operates Olive Garden, LongHorn Steakhouse and other major restaurant chains.

Green Century’s stance, according to a press release, is that Darden’s failure to eliminate antibiotics from its supply chain exposed the company to a number of business risks, especially those related to changing consumer preferences, reputational damage, competitive pressure and increased regulation.

An “F” on an industry report card . . .

Back in 2016, a $1 trillion coalition of 54 institutional investors, including Aviva Investors, Natixis Asset Management, ACTIAM, Mirova, Coller Capital and Strathclyde Pension Fund, launched an engagement campaign with 10 of the biggest U.S. and United Kingdom restaurant chains to call for an end to non-therapeutic use of antibiotics important to human health in their global meat and poultry supply chains.

A number of major restaurant chains targeted by investors have responded to calls for a phasing-out or reduction of antibiotic use in meat supply chains, including McDonald’s, Chipotle and Panera Bread, which topped an industry report card in 2017 on the use of antibiotics in meat. But Darden has been slow in addressing the issue: Hence Darden and Olive Garden received an “F” on that report card.

The change was too slow, said Green Century President Leslie Samuelrich, who elaborated in a press statement:

“Although Darden would have been better served to be at the forefront of the restaurant industry’s efforts to safeguard human health, I’m gratified that it finally acted on the risks posed by antibiotic misuse. It’s simply unacceptable to undermine the foundation of modern medicine to indiscriminately expose healthy animals to [as commonly described] medically-important antibiotics.”

 . . . Leads to Darden’s new animal welfare policy

Darden announced a commitment to purchase chicken raised without the use of medically-important antibiotics by 2023 and said it “will continue to work with suppliers on monitoring responsible antibiotic usage.”

The company added that for “all proteins, Darden requires its suppliers to comply with the FDA guidance that medically important antibiotics no longer be used with farm animals for growth purposes, and that all shared-class antibiotics (i.e., those used for both humans and animals) be used only to treat, prevent and control disease in farm animals under the supervision of a veterinarian.”

But Matthew Wellington, antibiotics program field director for the U.S.-based PIRG (Public Interest Research Group), a consumer advocacy group involved in public health issues, told the Orlando Business Journal that FDA guidelines on antiobiotics use are “too weak.”

Darden said its new animal welfare policy was the result of “a thorough and thoughtful process, which included extensive benchmarking and input from a variety of stakeholders.” It did not mention, however, shareholder pressure as among such reasons.

Antibiotics as a worldwide public health crisis

The World Health Organization, the U.S. Centers for Disease Control and Prevention (CDC) and the United Nations General Assembly have all declared antibiotic resistance a global public health crisis. Data suggests that antibiotic resistant bacteria sicken 2 million Americans each year and may be responsible for as many as 150,000 annual premature deaths in the U.S., according to the CDC, which would make it the third highest cause of death in the country.

Experts attribute the rise of antibiotic-resistant superbugs to the overuse of antibiotics in food-animal production. The FDA reports that 70 percent of all medically-important antibiotics in the U.S. are sold for use in livestock, predominantly for prophylactic (disease prevention) purposes rather than treatment.

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