McDonald's fries lose the transfats

NEW YORK (CNNMoney.com) -- McDonald's is messing with the sacred french fry -- and doing it for our own good.

The No. 1 burger chain said Thursday at its annual shareholders' meeting that within a year it will use only transfat-free oil to fry foods at all of its U.S. locations.*

Transfat oils add hydrogen to make food taste better and extend its shelf life, according to the Food and Drug Administration. The ingredient is widely used in fried and processed foods.

But the artery-clogging oil has come under widespread attack recently for contributing to the country's obesity epidemic. Last week, a nutrition advocacy group sued rival Burger King (up $0.78 to $24.68, Charts) over the hamburger chain's use of transfats.

McDonald's (Charts, Fortune 500) joins a number of food retailers that are kicking the transfat habit, among them Wendy's (Charts), Starbucks (Charts, Fortune 500), and Yum Brands (Charts, Fortune 500), the parent of Pizza Hut, Taco Bell, and KFC. Burger King has also vowed to eliminate transfats from its menu.

Last year New York City became the first U.S. city to pass a ban on transfat use that will rid local restaurants of the ingredient by 2008.

McDonald's quietly decided last fall to transition to transfat-free oils, but is gradually implementing the change to ensure a "seamless transition," said company spokeswoman Lisa McComb. In other words, the company wants to make sure the switch to a new frying oil doesn't ruin the taste of its sacrosanct fries.

The new oil is simply a different blend -- minus the hydrogen additive -- that produces the same flavor, McComb said. She noted it will be used not just for french fries, but for all of McDonald's fried foods.

The pace of McDonald's change over to the healthier oil is affected by the availability of canola and soybean crops grown in North and South America that produce the oil.

McDonald's now uses uses a healthier oil in 3,500 restaurants and will expand its use to all 13,700 locations within a year, said McComb.

In other company news, McDonald's CEO Jim Skinner told Reuters Thursday that he expects the world's largest restaurant chain to increase the pace of new restaurant openings. The company slowed its expansion rate four years ago to focus on improving its existing operations.

"We do expect to pick the growth rate up some," Skinner said during a news conference following the company's annual shareholder meeting in Oak Brook, Ill.

In recent years, McDonald's has increased the number of restaurants by about 0.9 percent to 1 percent, Skinner said. That rate is likely to increase to about 1.2 percent to 1.3 percent, he added, but did not give a time-frame.

--from staff and wire reports

Correction: an earlier version of this story stated that McDonald's plans to use the transfat free oil by the end of 2007. McDonald's plans to phase in the new oil within a year. CNNMoney.com regrets the error.