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PETA's beef turns into stock
Activist group is buying shares of Tyson Foods, Hormel and Denny's in bid to reach shareholders.
November 4, 2003: 8:15 AM EST
By Parija Bhatnagar, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Animal rights group PETA -- People for the Ethical Treatment of Animals -- said it is upping the ante against food companies and restaurant chains by buying their shares and taking its animal anti-cruelty campaign directly to the shareholders.

Calling it a "reinvigorated strategy," the agency said for the first time it is vigorously purchasing stock in the leading meat suppliers such as Hormel Foods, Tyson Foods, Pilgrim's Pride and dining chains Denny's Restaurants, Outback Steakhouse, Chili's parent Brinker International and Applebee's.

"We're taking on Wall Street," PETA spokesman Bruce Friedrich told CNN/Money. "We're buying 50 percent over the minimum number of shares required to submit a shareholder resolution."

Outback Steakhouse

Friedrich added, "Executives at these companies are often isolated from the horrors of what the farm animals have to endure. The resolutions will raise the issue because they are printed in the companies' proxy statements and mailed to the shareholders. This way, our campaign moves into an actual agenda, and companies will have to address it and argue their case."

Over the last month, PETA said it has acquired 150 shares of Austin, Minn.-based Hormel Foods (HRL: Research, Estimates), the leading processor of turkey and pork; 240 shares of Springdale, Ark.-based No. 1 chicken producer Tyson Foods (TSN: Research, Estimates); and 260 shares of Texas-based No. 2 poultry producer Pilgrim's Pride (CHX: Research, Estimates).

PETA now also owns 11,000 shares of casual dining chain Denny's (DNYY: Research, Estimates) and 110 shares of Chili's parent Brinker International (EAT: Research, Estimates), and will acquire stock in Outback Steakhouse (OSI: Research, Estimates) and Applebee's (APPB: Research, Estimates).

"There's a real concern in the food service industry over PETA, especially since it has gained traction in the marketplace following the recent settlement with Whole Foods Market (WFMI: Research, Estimates)," said Tom Agan, managing partner with Prophet, a San Francisco-based brand and marketing consultancy.

Whole Foods Market, the No. 1 natural food chain, announced last month that it would become the first major grocery chain to adopt humane animal treatment standards. PETA said it campaigned against Whole Foods for two years, requesting that it reevaluate its animal treatment standards.

"That development really changes the situation a lot," Agan said. "Even though shareholder resolutions generally don't always work, they do attract a lot of attention and publicity. It's the bad publicity these companies don't want."

John Banzhaf, professor of public interest at George Washington University, agreed.

"This could be a very effective tactic," Banzhaf said. "Anti-cigarette resolutions didn't work effectively because cigarettes are a fundamental part of the business for tobacco companies. But the publicity can be very effective with peripheral issues. Companies don't want to be forced to face a shareholder vote, especially when enough of the votes are owned by labor unions and universities, for example."

"Every once in a while, a resolution will pass, Banzhaf added. "In this case, these companies could be forced to implement audits of farm animal welfare."

PETA's beef in this instance is that companies involved in the meat trade need to implement more-humane guidelines and systems for the slaughter of farm animals such as chickens, pigs and cattle.

"Animals on factory farms and slaughter houses are mutilated, drugged and abused in ways that would be illegal if dogs or cats were treated similarly," PETA's Friedrich said. "The problem is that farm animals are exempted from the Animal Welfare Act. Therefore, companies often act with impunity."

For its part, Tyson Foods said PETA's allegations are unfounded. "PETA won't be satisfied until we're out of business," company spokesman Ed Nicholson said. "PETA picks companies with significant brand equity and campaigns against it because it will get the attention."

"We have a director of animal well-being to ensure policies are put into place and animals are treated humanely," Nicholson added.

Hormel Foods declined to comment on the matter.

Meanwhile, Pilgrim's Pride said the company places a high priority on humane treatment of poultry throughout the production process, and Denny's spokeswoman Debbie Atkins said the company was aware of PETA's recent stock purchase.

"We've worked with organizations such as the Food Marketing Institute to establish guidelines for animal welfare," Atkins said. "Our vendors have animal welfare guidelines in place, and we also ask them to agree to regular audits."  Top of page

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