KFC IN INDIA ETHICAL ISSUES

Each bird whom KFC puts into a box or a bucket had a miserable life and a frightening death. People would be shocked to see our footage of a KFC suppliers employee who walks through a barn, carelessly lighting lamps and letting flames fall on the terrified birds. The air inside these filthy barns reeks of ammonia fumes, making it difficult for the birds to breathe. No one with a grain of compassion should set foot in KFC.1 - Ingrid Newkirk, Director, PETA.2 The chicken they serve is full of chemicals, and the birds are given hormones, antibiotics and arsenic chemicals to fatten them quickly.3 - Nanjundaswamy.4

PROTEST AGAINST KFC

On August 20, 2003, a five-foot tall chicken complete with an ensemble of feathers and beak hobbled on a pair of crutches outside Kentucky Fried Chickens (KFC) Indian outlet in Bangalore. The chicken was brought by PETA (People for Ethical Treatment of Animals) activists, who carried placards reading, Quit India and Stop Playing Fowl (a pun on Foul). The chicken was placed at the centre and a peaceful protest was held against the alleged ill treatment of birds in KFCs poultry farms. Media persons were called to give the demonstration a wide coverage (Refer Exhibit I for a visual on the protest by PETA activists). Explaining the rationale behind the protest, Bijal Vachcharajani, special projects coordinator of PETA, said, Ours is the land of Gandhi. Just as 61 years back our leaders gave a call for colonizers to quit India, we too are saying we will not tolerate cruel multinationals.5 On the 61st anniversary of the Quit India movement,6 PETA India wrote a letter to the Managing Director of Tricon Restaurant International, the parent company of KFC, asking them to close their sole KFC outlet in India. They got no reply. PETA activists decided to protest against KFC by carrying crippled chicken, which represented the birds suffering in the KFCs farms. PETA claimed that after two years of intensive campaigning to increase animal welfare standards in poultry farms, other foreign fast food restaurants operating in India like McDonalds 7 and Burger King8 had improved the treatment of animals specially raised and slaughtered for food. Only KFC had not acted. Though PETA had organized other protests earlier, the crippled chicken campaign became the precursor for more intensive protests. PETAs was one of the many shows of protest against KFCs Indian outlet.

BACKGROUND NOTE
KFC was founded by Harland Sanders (Sanders) in the early 1930s, when he started cooking and serving food for hungry travellers who stopped by his service station in Corbin, Kentucky, US. He did not own a restaurant then, but served people on his own dining table in the living quarters of his service station. His chicken delicacies became popular and people started coming just for food. Kentucky Fried Chicken was born. Soon, Sanders moved across the street to a motel-cumrestaurant, later named Sanders Court & Cafe, that seated around 142 people. Over the next nine years, he perfected his secret blend of 11 herbs and spices and the basic cooking technique of chicken. Sanders fame grew and he was given the title Kentucky Colonel by the state Governor in 1935 for his contribution to the states cuisine. Sanders restaurant business witnessed an unexpected halt in the early 1950s, when a new interstate highway was planned bypassing the town of Corbin. His restaurant flourished mainly due to the patronage of highway travellers. The new development meant the end of this. Sanders sold his restaurant operations. After settling all his bills, he was reduced to living on a meagre $105 social security cheque. But Sanders did not lose hope. Banking on the popularity of his product and confident of his unique recipe for fried chicken, Sanders started franchising his chicken business in 1952. He called

it Kentucky Fried Chicken. He travelled the length and breadth of the country by car, visiting as many restaurants as possible and cooking batches of chicken. If the restaurant owners liked his chicken, he entered into a handshake agreement that stipulated payment of a nickel9 for each plate of chicken sold by the restaurant. By 1964, Sanders franchised more than 600 chicken outlets in the US and Canada. The same year, he sold his interest in his company in the US for $2 mn to a group of investors. However, he remained the public spokesperson for the company. KFC grew rapidly under the new owners and issued shares to the public on March 17, 1966. In July 1971, KFC was acquired by Heublein Inc. for $285 mn. By then, KFC had over 3,500 franchised and company-owned restaurants in the world. Heublein Inc. was acquired by Reynolds Industries Inc. (now RJR Nabisco Inc.) in 1982. In October 1986, the company again changed hands, and was acquired by PepsiCo Inc. for $840 mn. PepsiCo had other quick service restaurants too -- Taco Bell and Pizza Hut. PepsiCo hived all of them into an independent restaurant company called Tricon Global Restaurants in January 1997. In May 2002, Tricons name was changed to Yum! Brands Inc.10 to reflect its expanding portfolio of brands. By 2004, KFC emerged as one of the worlds most popular chicken restaurant chains. With more than 11,000 restaurants in nearly 80 countries, KFC enjoyed the patronage of nearly eight million customers everyday all over the world. KFC specialties included Original Recipe, Extra Crispy, Chunky Chicken Pot Pie, Twister and Colonels Crispy Strips chicken with home-style sides.

KFCS ENTRY IN INDIA

Foreign fast food companies were allowed to enter India during the early 1990s due to the economic liberalization policy of the Indian Government. KFC was among the first fast food multinationals to enter India. On receiving permission to open 30 new outlets across the country, KFC opened its first fast-food outlet in Bangalore in June 1995. Bangalore was chosen as the launch pad because it had a substantial upper middle class population, with a trend of families eating out. It was considered Indias fastest growing metropolis in the 1990s. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country in the next seven years. However, KFC got embroiled in various controversies even before it started full- fledged business in India. When the issue of granting permission to multinational food giants to set up business in the country came up for discussion in the Indian parliament, some members from the opposition parties were vocal in their displeasure. They criticized the governments decision saying that in India, where millions of people could not afford one meal per day, the government was inviting multinationals to establish fast food chains, which only the upper middle and affluent classes could afford. They pointed out that a piece of chicken was sold for the equivalent of a little more than $1 at KFC, more than the daily per-capita income in India. Leading economists vigorously opposed the idea of multinationals in the food business entering India as they posed a threat to domestic business. Nationalists feared a cultural invasion; environmentalists and farmers felt grain consumption by cattle for meat production would be detrimental and nutritionists highlighted the high rates of obesity, hypertension, heart disease and cancer (which were relatively low in India so far) in the US caused by consumption of meat, processed and fried foods which were high in sodium and cholesterol. All activists were unanimous in their opposition to foreign fast-food joints. They argued that traditional Indian recipes such as tandoori chicken11 were more nutritious than the junk-food alternatives.

PROBLEMS FOR KFC

From the very first day of opening its restaurant, KFC faced problems in the form of protests by angry farmers led by the Karnataka Rajya Ryota Sangha (KRRS)12. The farmers leader, Nanjundaswamy, who led these protests, vehemently condemned KFCs entry into India, saying

that it was unethical to promote highly processed junk food in a poor country like India with severe malnutrition problems. Nanjundaswamy expressed concern that the growing number of foreign fast food chains would deplete Indias livestock, which would adversely affect its agriculture and the environment. He argued that non-vegetarian fast-food restaurants like KFC would encourage Indian farmers to shift from production of basic crops to more lucrative varieties like animal feed and meat, leaving poorer sections of society with no affordable food. KRRS held a convention on November 01, 1995 to protest the entry of fast food multinationals and the Westernization of local agriculture. National banks, insurance companies, political parties and non-governmental organizations supported the convention. All parties attending the convention agreed that India needed a new Quit India movement against junk-food companies. Amidst these vociferous protests, the Indian Government tried to justify its actions by saying that economic liberalization policies would attract multinationals and their opening businesses would create employment and develop infrastructure. However, Nanjundaswamy differed with the governments contentions. He argued that fast-food companies brought jobs only for a handful of educated people and displaced the poor majority. He cited the example of Venkateshwara Hatcheries,13 which supplied KFC with broilers after closing down its restaurants in Mumbai and Pune as part of a deal with KFC. On January 30, 1996, KFCs Bangalore outlet again witnessed protesting farmers carrying Boycott KFC signs. Media reports stated that around 100 irate farmers entered the restaurant, smashed windows, broke furniture and ransacked the cash box, demanding that KFC should leave India. KFCs billboards were destroyed across the state by agitators. Following the violence, several farmers were imprisoned. On February 03, 1996, Nanjundaswamy was also jailed on charges of looting, attempt to murder and other offences. Despite these setbacks, KRRS did not relent and continued its protests against Western fast food joints in general and KFC in particular. KRRS maintained that the entry of Western fast food chains in India would threaten the livelihood of more than 70 per cent of the Indian population, which depended on agriculture. They regarded multi-national food companies as the first step towards the destruction of Indias food security. Nanjundaswami also said that apart from the threat to local agriculture, another negative aspect of fast-food chains like KFC was large-scale factory farming of chickens. He maintained that the chicken served by KFC was full of chemicals because the birds were reportedly being given hormones, antibiotics and arsenic to fatten them quickly. He called the chickens chemically poisoned. KRRS got a boost when Maneka Gandhi, former Environment Minister and animal activist, attacked KFC stating that they served over-priced processed chicken, which was artificially raised and refried several times. Ecologists also joined the farmers protests by saying that the opening of fast food joints meant more trash, including plastic lids, paper cups, bags and extra condiments, on the highways and sidewalks. NON-CONFORMITY WITH FOOD PRODUCTS REGULATIONS In August 1995, just a couple of months after launch, KFCs Bangalore outlet faced a major crisis when Municipal Food Inspectors visited the restaurant and found that KFCs hot & spicy seasoning contained nearly three times more monosodium glutamate (MSG, popularly known as Ajinomoto a flavor enhancing ingredient) than allowed by the Indian Prevention of Food Adulteration Act, 1954 (IPFAA).14 (Refer Exhibit II for the definition of adulterated food). Used in a wide range of fast foods, MSG had been associated with behavioural disorders, hyperactivity, severe brain damage in rats, nausea and headache among adults and worst, its teratogenic effects. Intake by pregnant women leads to retardation and birth defects in offspring. Unborn children were considered to be at grave risk as MSG concentrated in the placenta. Children under 12 were are also advised against taking MSG as it retarded brain development. The IPFAA fixed an MSG ceiling in fast foods at one per cent. The Food Inspectors examination, followed by

laboratory tests and analysis found that KFCs chicken contained 2.8 per cent of MSG. The MSG controversy reached a crescendo on September 13, 1995. The Bangalore City Corporation revoked the restaurants license and directed the police to close it on the ground that KFC not only exceeded the legal MSG limits but had also failed to disclose what seasoning it used in its preparations. It charged KFC with serving food that was adulterated, misbranded and unfit for human consumption. Refuting the charges, Sandeep Kohli, managing director of KFC India said, We serve the same product in Bangalore as we do in our over 9,000 restaurants in 78 countries. And we know for a fact that the level of MSG is what is within permissible norms.15 He further added that the health standards followed by KFC were among the best compared to other restaurants in Bangalore. The closure orders enraged both the local management of KFC and their US bosses. PepsiCos Senior Research Department argued that India lacked the laboratory equipment needed to accurately test the level of MSG in food products. Meanwhile, to test MSG levels, an Indian business weekly Outlook - bought samples of fried chicken from KFC and took them to the Food Research and Analysis Centre of the Federation of Indian Chambers of Commerce. The analysis showed that KFC had the highest level of MSG, much above the permitted levels. However, PepsiCo refused to accept the result of the tests and put forth the same argument that Indian labs were not well-equipped to measure the additive accurately. KFCs management approached the Karnataka State High Court and obtained a stay order against the closure orders issued by the Bangalore City Corporation. The judge said the restaurant could operate as usual till full court hearings. After securing the stay order, KFCs management announced at a press conference that all they wanted was to let customers decide and if the latter did not like the companys products, it would anyway have to close the shop. But, soon after reopening, KFC had to face the wrath of farmers who attacked the restaurant and destroyed the billboards of the company. KFC had to then run its business under police protection. Undeterred by the problems at Bangalore, PepsiCo opened a second KFC outlet in Delhi, the national capital, in October 1995. KFCs management also announced that six more outlets would be opened in Delhi by the end of 1996. However, in a couple of weeks, the Delhi outlet too faced protests by a coalition of farmers, vegetarians and environmentalists. Within a couple of weeks of launch, the Delhi restaurant had to stop its business as health officials cancelled its license on November 06, 1995 on the grounds that the coating mix imported from the US contained sodium aluminium phosphate (SAP)16, which was hazardous to human health. KFC sought redress from the Delhi High Court and argued that the food contained no harmful chemicals and that the amount of SAP, an ingredient in baking soda, was within the limits approved by the World Health Organization and the US Food and Drug Administration. The charges were withdrawn as KFC proved that SAP was used in small quantities in the baking powder and was not harmful. The restaurant then resumed business. KFC won a favourable order from the Delhi High Court, but this did not deter farmers associations from resuming their protests. In December 1995, the Government of India permitted higher levels of MSG in Indian food,17 which meant that KFC could continue its business. The activists retaliated by taking up other issues against KFC. The Swadeshi Jagran Manch (National Awakening Forum)18 began a probe into the hygiene conditions at the restaurant. An inspection by food inspectors found flies buzzing around the kitchen and garbage cans just outside the restaurant premises. The Municipal Corporation of Delhi served a closure order on grounds of hygiene and sanitation. Thus, the Delhi KFC outlet was closed within 23 days of re-opening. Later, KFCs management decided to close the outlet permanently citing high rentals as the prime reason. They said that the outlet was hit by high rents and the cost of doing business in Delhi was not in line with its worldwide standards. Apart from this, the main ingredient chicken, was easily available in the south, east and western parts of India, but not in the north. So, procuring chicken also became an expensive proposition for KFC. Thus, the Bangalore restaurant remained the sole KFC outlet in India for many years. However, it had to face continuous protests from PETA

against the alleged cruel treatment of chickens by KFC staff and suppliers. CAMPAIGNS BY PETA By late 1990s, the MSG controversy and the protests by nationalists and farmers subsided. However, KFC faced a new problem in the form of PETA. PETA had been protesting for a long time against KFC at the international level on the grounds that KFC was extremely cruel to chickens and did not care to provide even minimum hygiene for the birds at its factories. It ran a special website called www.kfcfriedcruelty.com which detailed the inhuman treatment of the birds in KFC poultry farms and the slaughter houses of the suppliers. PETA India also launched an extensive protest programme against KFCs Indian outlet. It said that despite repeated appeals to the management, KFC had not cared to improve either the conditions or the treatment of birds. PETA urged the Indian public not to go to KFCs restaurant and asked them to demand its closure in India. The protests grew rampant from 2003 onwards as the company did not budge. However, unlike the previous violent protests by the farmers, PETA demonstrations were peaceful. PETA then started a mass education programme stating that it wanted to enlighten people about the cruelty suffered by chickens at KFC poultry farms. KFC stands for cruelty was the slogan of PETA. Pamphlets with a graphic description of the cruelty were distributed. KFCs spokespersons denied the charges and said the company was committed to the well-being and humane treatment of chickens. To substantiate its allegations regarding KFCs cruelty, PETA released a video documenting the daily suffering of thousands of chickens in a factory farm in Venkateshwara Hatcheries in Pune that supplied chickens to KFC. The 10- minute video gave a telling description of the plight of the birds with visuals. This was premiered at a news conference at Bangalore on October 09, 2003. It showed chickens stuffed into overcrowded warehouses, pushing each other for food, a barn littered with carcasses of chickens that had died of disease, dirty and injured chickens that never received any medication and chickens suffering at the hands of indifferent staff (Refer Exhibit III for pictures of birds shot by the camera). The video showed thousands of chickens crammed into sheds that stank of ammonia fumes from accumulated waste. The birds were forced to live for whatever time they were alive in the amount of a space equivalent to a standard sheet of paper. They had barely enough room to move. When the birds were killed, they were barely two months old19. They were genetically engineered and overfed to get fat faster. Being abnormally top-heavy, the birds suffered from limited mobility, leg deformities, broken bones and heart attacks. But, the birds received no treatment whatsoever. The beaks were cut off using a hot blade without giving anaesthesia (Refer Exhibit IV for PETA's detailed fact sheet of cruelty). Apart from these inhuman conditions, the young chicks also suffered the callousness of the staff, who grabbed them by their legs and stuffed them into crates for being transported to the slaughterhouse by lorry. The mode of transportation violated the legislative provisions regarding animal transportation (Refer Exhibit V for the relevant provisions). Many birds died during transport. The birds were shackled upside down at the slaughterhouses. They were often fully conscious when their throats were cut or when they were dumped into tanks of scalding hot water to remove their feathers. The video contradicted KFCs statements to the media that its supply farms strictly adhered to animal welfare standards. PETA reiterated that KFC stands for cruelty and we do not need this cruel outlet in India. This cruelty must be stopped. All we are asking for is for reasonable improvement on our list of demands or get out. I hope the people of India will join us.20

THE AFTERMATH
By late 2003, PETA further intensified its campaign against the cruel treatment meted out to chickens by KFC through protests at regular intervals. Celebrities like Anoushka Shankar, daughter of the legendary sitar maestro Ravi Shankar, directly supported the cause of PETA. Anoushka, a sitarist herself, wrote a letter to the top management of PepsiCo condemning the continued cruelty of KFC in spite of repeated requests of PETA. The organization also had the support of other celebrities like the famous cricket player Anil Kumble (based in Bangalore), popular Indian models like Aditi Govitrikar, the late Nafisa Joseph and John Abraham, who promoted vegetarianism. Film actresses like Raveena Tandon and Ameesha Patel also took up the cause of animal abuse. Undeterred by the continued protests, KFC added three more outlets21 to its existing one at Bangalore. KFC also announced a major expansion programme for 2005. Sharanita Keswani (Keswani), KFCs Marketing Director, said that as the retail business was poised for a boom in India, they considered it the right time for expansion. Feeling positive about the flourishing malls in all big cities, Keswani revealed that this time KFC planned to have a presence in prime locations or in a mall where turnout would be assured. The company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata, Chennai and Hyderabad, where mall culture was fast developing. PepsiCo also decided to concentrate on the expansion of KFC since its other brand, Pizza Hut, had successfully established a strong foothold in India. Vegetarianism was predominant and was a way of life in India. Many people ate non-vegetarian food only occasionally and avoided it during festivals or religious occasions. KFC did not want to alienate the vegetarian community which was in majority in India. It decided to add more vegetarian and Indian items to the menu, in an effort to become attractive to both vegetarian and non-vegetarian customers. Rather than affecting chicken sales, the presence of vegetarian dishes in the menu was expected to make the brand more appealing to a wider section of consumers. The diversification into vegetarian food was considered inevitable by the management to establish itself as a universal brand across the country. While KFC was busy planning extensive expansion, PETA conducted another demonstration at Bangalore on February 17, 2004. The protesters held placards reading, KFC quit India and Dont let KFC roost in India. They also distributed pamphlets stating that apart from the abuse of chickens raised for food, PETA was targeting KFC because the company killed more chickens, more than 750 million per annum, compared to any other food company. PETA said, As the worlds leading killer of chickens, KFC had the responsibility to take the lead in eliminating at least the worst abuse, but had done nothing to address them. In response to this protest, Pankaj Batra, Director, Marketing, Indian Sub-Continent, Yum! Restaurants International, observed that KFC was committed to the well being and humane treatment of chickens and that they required their suppliers to follow the welfare guidelines developed by Yum! Restaurants International, US, along with leading experts, on their Animal Welfare Advisory Council (Refer Exhibit VI for KFCs Poultry Welfare Guidelines). He emphasized that they respected Indian law and that KFC guidelines completely adhered to them. However, PETA was not convinced and announced that it would continue its protests against the multi-national until it changed its cruel practices or left India. The battle between KFC and PETA in India continued.