McDonald's goes on the defense against activist investor Carl Icahn in escalating battle over pork production

• McDonald's is pushing back against Carl Icahn in a battle over its pork production.
• Icahn has slammed the fast-food chain for its use of gestation crates for pregnant pigs.

McDonald's is pushing back against billionaire investor Carl Icahn in a battle over its treatment of pigs.

Last week, Icahn slammed McDonald's for its use of gestation crates for pregnant pigs, which have been widely criticized as inhumane devices. In 2012, the fast-food chain had initially pledged to order suppliers to do away with the crates over a 10 year period. But now that the decade is up, Icahn has said the company has failed to live up to its goal.

"You gotta live up to your promise, and you got to do this," Icahn told Bloomberg. Icahn told Bloomberg he was introduced to the issue of gestation crates from his daughter, who was involved with the Humane Society. He described the issue as "emotional," not financial. The activist investor is known to take large positions in public companies before agitating for change. But in the case of McDonald's, Icahn has said he has 200 shares, worth about $50,000.

McDonald's is now going on the offense.

In a news release on Sunday, McDonald's noted that Icahn is a majority owner of Viskase, a company that produces packaging and casings for the pork and poultry industry.

"Mr. Icahn's ownership provides him with unique exposure to the industry-wide challenges and opportunities in migrating away from gestation crates," the fast-food chain said in the release. "Thus, it's noteworthy that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to those of McDonald's 2012 commitment."

The investor launched a proxy battle over two seats on the fast-food chain's board, nominating Leslie Samuelrich and Maisie Ganzler to stand for election at this year's annual meeting, McDonald's confirmed.

Samuelrich is a president at Green Century Capital Management, an environmentally and sustainably focused investment firm, according to her LinkedIn profile. Ganzler is chief strategy and brand officer at the sustainable food service company Bon Appétit Management, according to her LinkedIn profile.

But the Golden Arches is pushing back against Icahn, defending its "pioneering" commitment to leading the industry's production of pork. An estimated 30 to 35% of US pork production has moved to group housing systems, McDonald's said in the statement.

"Despite McDonald's progress, Mr. Icahn has instead asked for new commitments, including to require all of McDonald's US pork suppliers to move to 'crate-free' pork, and set specific timeframes for doing so," the restaurant chain said in the news release. "While the Company looks forward to promoting further collaboration across the industry on this issue, the current pork supply in the US would make this type of commitment impossible. Furthermore, it reflects a departure from the veterinary science used for large-scale production throughout the industry, and would harm the Company's shared pursuit of providing customers with high-quality products at accessible prices."

The restaurant chain said that the fast-food company expects to source 85 to 90% of its US pork from sows not housed in gestation crates during pregnancy, and that it expects all of its pork will come from sows housed in groups by the end of 2024.

Representatives for Carl Icahn did not immediately respond to a request for comment from Insider.