NEWS > Business
McDonald's shrugs off obesity case
2005-01-27 01:30:03 XinhuaEnglish

BEIJING, Jan. 27-- McDonald's Corp, the world's biggest restaurant chain, said it would prevail in a"frivolous" lawsuit an appeals court reinstated on Tuesday in which New York teenagers claimed the hamburger chain hid health risks of fatty foods that made them obese.

"The key issue remains personal responsibility, and making informed choices," M
cDonald's spokesman Walt Riker said on Tuesday. He predicted the case will be dismissed again.

An appeals court on Tuesday overruled US District Judge Robert Sweet's decision to dismiss the suit, which seeks billions of dollars in damages. He ruled that Ashley Pelman and Jazlen Bradley and their lawyers should be allowed to collect evidence to support their case. It is the first complaint accusing a fast-food chain of hiding health risks of its food to be considered by a judge.

"It's really laying out a precedent in terms of what corporations have to own up to when it comes down to their bottom-line message," film director Morgan Spurlock said in an interview on Tuesday after his documentary"Super-Size Me" was nominated for an Academy Award. In the film, Spurlock eats only at McDonald's restaurants for 30 days and gains 25 pounds.

The case comes at a time of growing public concern in the United States over obesity and drew comparisons by some analysts to the health risks of cigarettes, which spawned lawsuits by sick smokers.

"Trial lawyers are trying to turn fast food into the next tobacco, which it is not," said Ron Paul, president of Technomics Inc, a Chicago-based food consulting company.

Investors including Oakbrook Investments LLC's Janna Sampson said the suit probably will not derail almost three years of the company's rising share price.

"The market is going to think this is frivolous," said Sampson, who helps invest US$1.2 billion, including 988,610 McDonald's shares, at the Lisle, Illinois-based firm."I don't see how they can blame any one firm for being overweight."

Shares of Oak Brook, Illinois-based McDonald's rose 20 US cents to US$31.94 on Tuesday in New York Stock Exchange composite trading.

The teenagers said they ate at McDonald's restaurants three to five times a week over 15 years. The suit claimed the company hid the health risks of Big Macs, Chicken McNuggets and other foods high in fat and cholesterol in advertisements that appeared in 1987 in the United States and in brochures circulated in Britain.

McDonald's said there was no evidence the teenage plaintiffs, one of whom was born in 1988, saw the ads. The company also defended the accuracy of its ads.

McDonald's is expected to report on tomorrow that fourth-quarter profit climbed more than four-fold to US$568 million, or 46 US cents a share, the average estimate of 19 analysts polled by Thomson Financial. A year earlier, profit was reduced by costs for selling the Donatos Pizzeria chain and closing Boston Market restaurants outside the United States.

Sales at McDonald's restaurants open at least 13 months climbed 5.1 per cent in the quarter, helped by higher-price items including meal-sized salads that Chief Executive Jim Skinner said appeal to health-conscious consumers.

"We're giving them relevant choices around the menu," Skinner said.

Skinner took over as chief executive in December after Charlie Bell resigned to fight colorectal cancer. Bell died on January 16 at the age of 44, after having been diagnosed in May.

Samuel Hirsch, a lawyer representing the teenagers, did not immediately return a call seeking comment on Tuesday.

"For me it's a tremendous decision," Spurlock said."I think we've reached a point where people and the judicial system are starting to realize that there is a separation between personal and corporate responsibility, that corporations do have a line they have to uphold when it comes down to what they present to people."

John Barker and David Poplar, spokesmen for No 2 Wendy's International Inc, did not immediately return telephone messages left at their offices in Dublin, Ohio, on Tuesday night. A phone message left at Burger King Corp's public relations office in Miami on Tuesday night was not immediately returned. Burger King is the second-largest US hamburger chain.

McDonald's discloses nutritional information about its foods in restaurants, said Irwin Kruger, a franchisee who owns seven McDonald's in Midtown Manhattan. The chain said last year it planned to phase out its super-size French fries and soft drinks to simplify its menu and promote healthier offerings.

"We offer healthy choices," Kruger said yesterday."It is up to individuals to set limits and to be informed."

Tuesday's appeals court decision overruled Sweet's decision to dismiss the suit on grounds the teenagers failed to allege enough facts connecting McDonald's food to their obesity.

The decision"is going to scare the hell out of McDonald's and every other fast-food company," said John Banzhaf, a consultant on the suit who helped initiate litigation against tobacco companies 30 years ago."We can now demand a lot of their secret documents."

(Source: China Daily by Chris Burritt)

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