MCDONALD’S decision last week to phase out human antibiotics from its US chicken supply will add to production costs in a tight-margin business that will probably be borne mostly by poultry companies.
McDonald’s, which uses top chicken suppliers like Tyson Foods, has given producers two years to eradicate antibiotics used on humans from barns and hatcheries.
It is going to be expensive and may take longer than planned: switching to antibiotic-free chickens could increase on-farm costs by up to 3 percent.
Perdue Farms, a supplier with about a third of the volume of Tyson, said it had taken more than a decade and millions of dollars to make such a change.
McDonald’s would use its purchasing muscle as the world’s largest restaurant chain to avoid passing extra costs on to customers, who were increasingly lower income as more affluent diners preferred rivals like Chipotle Mexican Grill, analysts said.
Marion Gross, McDonald’s senior vice-president of North America supply chain management, declined to say by how much its costs for chicken could rise.
While veterinary use of antibiotics is legal, controversy has grown over the routine feeding of antibiotics that are important to humans to otherwise healthy chicken, cattle and pigs in a bid to stave off disease and help the animals grow more quickly.
The risk is that overuse can spur the creation of superbugs that develop cross-resistance to antibiotics used to treat humans.
– Reuters