The pressure on McDonald’s Corp. to cook its French fries in a healthier oil intensified today with the passage of a New York City ban on artery-clogging trans fat at all city restaurants.
“Now that they’ve done it in New York, I bet you’re going to see trans fat banned in Chicago and other cities,” says Bonnie Minsky, a Northbrook-based dietician and spokeswoman for the American College of Nutrition. “They can’t say they’re working on recipes anymore, like they have for the last few years. The pressure now is extreme, and it needs to be.”
In recent months, major McDonald’s rivals have either switched to cooking oils containing lower levels of trans fat or announced a timeframe for doing so.
Wendy’s International Inc. in August began frying food in a blend of corn and soy oil containing little trans fat while KFC Corp. in October said it will switch to a trans fat-free cooking oil by the end of April.
Taco Bell Corp. last month said it will eliminate trans fat from many of its menu items by April, Burger King Holdings Inc. said it will test healthier oils soon and Culver’s, a Wisconsin-based burger chain, said it will switch to a trans fat-free canola oil by March 1.
In June, Alderman Edward Burke (14th ward) introduced a trans fat ordinance here. After a few iterations, the proposed ordinance now calls for restaurants with more than $20 million in annual sales to limit the level of trans fat in its food and to disclose the amount.
The proposed ordinance is currently in the city council’s license and consumer protection committee.
“The committee members have indicated a go-slow approach to consideration and possible adoption of the ordinance,” says a spokesman for Alderman Burke. “I think they want to study it further. In the meantime, we feel fast-food chains are being put under the spotlight not only because of New York’s adoption of a ban today but because of the continuing drumbeat of our hearings. The problem is that restaurant chains are unable to explain why they can’t drop trans fat from the menu.”
Since early 2003, McDonald’s has been saying that it’s been having trouble finding a healthier oil that retains the taste of its iconic fries, which are currently fried in trans fat-producing partially hydrogenated vegetable oil.
The ban did not impact shares of McDonald', which hit an intraday high of $43.43 - the first time the company's stock has been above $43 since January, 2000.
After an analysts meeting with McDonald's CEO Jim Skinner, J.P. Morgan's John Ivankoe affirmed McDonald's as its top large-cap pick, saying in a note to clients that McDonald's U.S. same-store sales are ``robust,'' helped by breakfast sales, a balance between value and premium product promotions and extended hours.
The ban that New York’s board of health passed today will go into effect in July 2007, but restaurants will have another year to come up with a trans fat substitute for baked goods. It’s the first city to pass such a ban.
In a statement, a McDonald’s spokesman said, “As we’ve stated before, we will comply with the New York Board of Health’s proposal.”
He also said McDonald’s is testing zero trans fat oil in some U.S. restaurants but that “we are not yet prepared to announce a national rollout for an alternative oil blend.”
Of McDonald’s more than 13,000 U.S. restaurants, approximately 300 are in New York City.
“It’s shocking that it took that long for a ban like this to pass. This should have been done 15 years ago,” Ms. Minsky says. “There’s no safe level of trans fat.”
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