Want a Lawsuit With That? McDonald's Defends Happy Meal Marketing

McDonald's Corp. (MCD) Chief Executive Jim Skinner has rebuffed a call by the Center for Science in the Public Interest (CSPI) to end the distribution of Happy Meal toys. CPSI has alleged that the giveaway promotions contribute to childhood obesity by encouraging the consumption of fattening food.

CSPI garnered headlines last month when it served notice to the world's largest restaurant chain that it would file suit over the toys included in Happy Meals if the practice was not stopped within 30 days. That deadline is due to expire on July 22. A lawsuit has not yet been filed.

Fighting Back

Not surprisingly, Skinner took great offense at the notion that McDonald's illegally markets products to children. He was particularly incensed that CSPI's likened McDonald's to strangers who hand candy to children, and the characterization of America's children as an "unpaid drone army." Skinner demanded that CSPI apologize. Echoing conservative commentators, including Bill O'Reilly of Fox News, Skinner accused CSPI of suggesting that families are unable to make their own choices about the food they consume.

"You say you want a dialog with McDonald's but your inflammatory rhetoric suggest otherwise," Skinner wrote to CSPI Executive Director Michael Jacobson on July 6. "At McDonald's, we listen to what our customers tell us. For the past 30 years they have told us -- again overwhelmingly --that they approve of our Happy Meal program...CSPI is wrong in its assertions and frivolous in its legal threats."

The CSPI lawsuit comes after officials in Santa Clara County, Calif., voted to ban Happy Meal toys unless McDonald's met certain nutritional guidelines, along with similar giveaways offered by rival fast-food chains. Childhood obesity rates have more than tripled over the past 30 years, and some experts argue that McDonald's and other purveyors of cheap, calorie-rich food bear some of the blame.

Unhealthy Combination

According to CSPI, more than 90 percent of the possible Happy Meal combinations are unhealthy. Many people also order the more fattening meals when healthier alternatives are advertised. The chain even boasts that it has sold more than 100 million Happy Meals with Apple Dippers since 2008, and in 2009 alone it served 31 million gallons of milk.

Stephen Gardner, CSPI's litigation director, tells DailyFinance he still hopes to avoid litigation against the fast food giant, but her is prepared to pursue it if necessary.

"I did not view Jim Skinner's letter as a response to our letter," he says. "I saw it as a press release. ... We weren't just whistling Dixie when we wrote them."

CSPI, which still is unsure where it will file the case, argues that Happy Meal toys constitute deceptive marketing because their purpose is to encourage young children -- many of whom do not understand the concept of advertising -- to encourage their parents to bring them to McDonald's. In some states, it is not necessary for the child to make a purchase to prove the law had been broken.

"This is classic consumer deception," Gardner says. "Good lord, they make toys for kids under 3."

McDonald's, which declined to comment beyond Skinner's letter, counts on Happy Meals to help drive traffic to its stores. Little wonder the company objects to CSPI's argument.