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http://today.reuters.co.uk/news/NewsArticle.aspx?type=businessNews&storyID=uri:2006-04-18T033406Z_01_N17291034_RTRUKOC_0_UK-BIRDFLU-MCDONALDS.xml&pageNumber=1&summit=

McDonald's isolates chickens to fight bird flu

Tue Apr 18, 2006 4:34 AM BST15
By Brad Dorfman

OAK BROOK, Illinois (Reuters) - McDonald's Corp. is having its suppliers in Europe bring normally free-range chickens indoors to try to contain the spread of bird flu and to make sure the food it serves is not tainted with the disease, the company said on Monday.

"We are now imposing standards which require that those free range chickens that are producing free-range eggs be brought into houses because of the threat of the spread of avian influenza," said Catherine Adams, vice president worldwide quality at McDonald's.

The standard, in place for six to eight months, is not just for birds producing eggs McDonald's uses, but for the poultry it serves to customers, too, company officials said in presentations to reporters on Monday.

The move, which Adams said was somewhat controversial in parts of Europe because of the culture of raising free-range birds, is one of several steps the world's largest restaurant company is taking to make sure customers will still buy poultry in its restaurants even if there is an outbreak of bird flu in the region.

While McDonald's is best known for its hamburgers, chicken has become big business for the company.

In the United States, for example, the company reached the point during 2005 where it sold more chicken on a dollar basis than it sold beef, said Mike Roberts, president and chief operating officer.

In the United States, the company has had its suppliers test flocks for bird flu for the past six months, said Frank Muschetto, senior vice president and chief purchasing officer.

"In the U.S. we have vertical integration, the flocks are raised just for McDonald's, so we have total control over it," he said.

In other countries, that is not the case. For example, in parts of Europe, testing is controlled by the government and only occurs then the government allows, he said.

"Every place where we are able to test, we test the flocks," Muschetto said.

The H5N1 avian flu virus has killed 109 people in nine countries -- Turkey, Azerbaijan, Egypt, Iraq, Indonesia, Thailand, Vietnam, China and Cambodia. It has infected 194 people. The virus has spread across Asia and into parts of the Middle East, Africa and Europe since 2003, but has yet to be found in North or South America. 

McDonald's has benefited from a reputation for food safety, Roberts said, noting the company did not see a decline in chicken sales in China when bird flu hit that country.

"We're selling more chicken now than before (the outbreak)," Roberts said.

There was a decline in chicken sales at McDonald's parts of Europe when the disease hit, but that business has recovered, he added.

McDonald's shares closed down 53 cents, or 1.5 percent, at $34.32 on Monday on the New York Stock Exchange.