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San Francisco's New Ordinance: The Beginning of the End for Happy Meal Toys

After waging an intense lobbying effort on behalf of the increasingly controversial Happy Meal, McDonald's (MCD) has lost a important battle in the debate over childhood obesity. San Francisco's Board of Supervisors voted to ban toy giveaways in meals that don't meet nutritional guidelines or that don't contain any fruits or vegetables, which is currently all versions of the Happy Meal.

Although the ban applies to all fast food meals, the biggest impact will be on McDonald's, which is the largest user of toy giveaways. The ordinance, which goes into effect December 2011, signals that the company will either need to get serious about making its Happy Meals healthier or settle into the idea that this may very well be the beginning of the end for toy giveaways. The Center for Science in the Public Interest has called Happy Meal toys a "predatory practice" that "undercuts parental authority and exploits young children's developmental immaturity." The group is preparing a lawsuit against McDonald's for unfair and deceptive marketing.

The fallout from San Francisco won't be financial -- there are just 19 McDonald's in the city. Instead, it's symbolic. The actions of the city's tiny population of 776,000 often have an outsized impact on our national consciousness and the political landscape. San Francisco was a leader in recycling, the move towards reusable grocery bags, getting rid of trans fats and menu labeling for chain restaurants.

McDonald's realized this potential ripple effect and flew several executives out to testify at City Hall against the ban. Cindy Goody, U.S. director of nutrition and Karen Wells, vp of strategy and menu, argued -- unsuccessfully -- that there is no evidence linking fast food toys to weight gain and that Happy Meals aren't even that fattening. In a San Francisco Examiner editorial last month, Wells wrote:

According to research from a variety of sources, a Happy Meal with a four-piece Chicken McNuggets, small french fries and apple juice contains fewer calories and less sodium than a turkey sandwich with mayonnaise, potato chips and low-fat milk...A cheeseburger Happy Meal with eight ounces of low-fat milk and apple dippers -- a half-cup of sliced apples with low-fat caramel dip -- has fewer calories and less fat than the iconic peanut butter and jelly sandwich with low-fat milk and an apple.
McDonald's well-orchestrated defense led some to question whether the company had bused in Chinese people to speak out against the ban. The SF Appeal reported:
Many had similar speaking points. To further thicken the plot, one of the pro-McNugget speakers was seen consulting a script in the hallway.
McDonald's denied having anything to do with the strange Chinese uprising. If McDonald's is smart (and it usually is), it'll work on coming up with a healthier Happy Meal. The San Francisco ordinance allows for toys to remain in fast food meals if they meet the following guidelines:
  • At least 1/2 cup of fruit or 3/4 cup of vegetables
  • Less than 600 calories
  • Less than 640 mg sodium
  • Less than 35% of calories from fat
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