Results
Political economic and regulatory context for TNC activities: CHIA level A
Level A includes issues related to corporate global structure, the regulatory environment and taxation. Our research focused on Australia, but during the process it was recognised that inter-country comparisons are important; including for comparing different regulatory contexts. Any findings relevant to CHIA level A are reported under CHIA levels B and C.
McDonald’s structure, practices and productions: CHIA level B
In this section we discuss our findings on McDonald’s corporate structure, political and business practices, and its products and marketing as identified under CHIA level B. Table
1 presents a summary of the structure, practices and production of McDonald’s Australia.
Table 1
McDonald’s structure, practices, products and marketing
McDonald’s corporate structure |
McDonald’s global company is managed under distinct geographic segments. Australian operations are part of the Asia Pacific, Middle East and Africa (APMEA) segment. |
McDonald’s political practices |
• McDonald’s engages lobbyists, with corporate strategies designed to ensure the least restrictive regulatory environments. |
• McDonald’s engages in strategic industry alliances that can help influence regulatory oversight and promote corporate interests over health and wellbeing. This includes the integrated and creative marketing directed to children and young people. |
McDonald’s business practices |
• McDonald’s range of corporate social responsibility initiatives can contribute to more environmentally sustainable corporate operations with potential for improved population health and welfare. |
• McDonald’s alliance with dieticians may contribute to improving the composition of ultra-processed food. |
• McDonald’s corporate philanthropy can contribute towards positive health and wellbeing. |
• However, McDonald’s influence over government policy via lobbyists and industry representative may compromise obesity prevention. |
• McDonald’s taxation strategies undermine governments’ ability to fund health and welfare policies including funding for corporate monitoring and regulation. |
• Claims of limited community consultation on new outlet expansion raises concerns over the power imbalance between McDonald’s Australia and local communities. |
McDonald’s products and marketing |
Products |
• McDonald’s menu has evolved to include a range of healthier options. |
• However, many of McDonald’s food products are ultra-processed, high in kilojoules, fats, sugar and sodium. These can lead to obesity which carries an increased risk of diabetes, cancers, premature strokes and cardio-vascular disease, a shorter lifespan, and other health and psychological problems. |
• Childhood obesity is associated with poor psychological and social wellbeing, poor self-esteem, bullying, anxiety, stigma and depression. |
Marketing |
• Voluntary advertising codes may help McDonald’s to review marketing strategies However, monitoring of compliance relies on public complaints. |
• McDonald’s engages high profile media support which may help strengthen integrated marketing to children. This promotes brand choices linked to unhealthy food and childhood obesity. |
• Marketing of McDonald’s purchase-driven donations and range of sponsorships promotes purchasing practices which may put corporate interests ahead of health. |
• McDonald’s online ordering, drive through outlets, and home delivery all provide ease of access to unhealthy products. |
McDonald’s political practices
McDonald’s Australia is a member of the Australian Food and Grocery Council (AFGC). As such it has the capacity to influence the national regulatory environment. The AFGC is the leading national organisation representing Australia’s packaged food, drink and grocery products manufacturers. Its role is to lobby to ‘help shape a business environment that encourages the food and grocery products industry to grow and remain profitable’ [
54]. The AFGC Quick Service Restaurant Initiative (QSRI) Forum members are the major fast food outlets in Australia. The QSRI Forum has developed a common framework for fast food companies to promote only healthier choices to children as part of Australia’s self-regulated system of advertising and marketing [
55].
The limitations of QSRI self-regulation include that it only applies to a very narrow range of advertised foods and does not cover packages sold as “family meals”, despite the fact that they are designed to be consumed by children and their parents [
56]. As encapsulated within an AFGC commissioned report [
57], the AFGC’s vision of regulation is framed in a way that is in direct conflict with that of public health advocates. The report states that “the current regulatory stance is overly risk averse with a narrow focus on minimising risks to health and the environment” ([
57] p. iv). It calls for a cut to the operating budget of regulators, and for granting corporate approvals as the default position.
Food industry documents identify that McDonald’s Australia is also a member of the Business Council of Australia (BCA) which “provides a forum for Australian business leaders to contribute directly to public policy debates”, with membership comprising the CEOs of Australia’s top companies [
58]. McDonald’s CEO, Andrew Gregory, is a committee member of the BCA’s Labour Market, Skills and Education Committee. McDonald’s Australia also employs one of the biggest lobbying firms, Barton Deakin, which “helps business work more effectively with the Liberal National Coalition in Government and Opposition around the country” [
59]. McDonald’s Australia’s formal links with business lobby groups serve to support a market rather than public health ethos in its operations.
A former franchisee highlighted McDonald’s potential influence over political and regulatory structures:
If you have a company that employs probably the best part of 100,000 employees you have a lot of clout… So McDonald’s will have a fair level of push in decision-making across what affects their business.
This is the view of one person only and is not publicly verifiable. Lobbying government is conducted by professional lobbyists.
McDonald’s business practices
McDonald’s Australia engages in a range of business practices that may provide positive outcomes for the community. Its website states:
We are committed to sustainable business practices and are determined to conduct our operations in a manner that does not compromise the ability of future generations to meet their needs [
51]
.
McDonald’s has a range of corporate social responsibility (CSR) initiatives including corporate philanthropy. The corporation’s website gives a comprehensive overview of the scope of CSR activities which include devising healthier menu options in collaboration with accredited dieticians; working to maintain a sustainable supply chain; improving packaging and waste management; and undertaking animal health and welfare audits [
26]. McDonald’s Australia reports that, as part of its corporate philanthropy initiatives, it funds all general and administrative costs of Ronald McDonald House Charities. This is to ensure that 100% of these publicly donated funds are used for their programs supporting sick children and their families.
McDonald’s global business is conducted in geographic segments with Australian operations being part of the Asia Pacific, Middle East and Africa (APMEA) segment [
60]. This structure allows for taxation strategies that bolster corporate profitability. Under international taxation legal structures, transfer pricing between two of the same companies allows for distortions in the price of trade, or transfer ‘mispricing’; and for minimising taxation through reporting profits in tax havens [
61]. No single authority necessarily sees the complete tax accounts of the TNC as a whole [
62], and there is a lack of single country taxation reporting.
This can result in declining tax revenues from corporations; forcing governments to substitute other taxes, with a regressive impact on income distribution and cuts to public investment in health and other forms of social and economic infrastructure [
63]. A 2015 report documents McDonald’s global and Australian taxation minimisation strategies [
64]. Such corporate taxation measures, often undertaken through complex transactions that are facilitated by large global accounting firms [
65], also reduce the capacity of countries to build strong public sectors that can develop cross-sector policy coherence for health [
66].
McDonald’s Australia’s products
McDonald’s website provides extensive material on the nutritional value, energy levels, and allergy-related information across its food and beverage range [
67]. It describes many products with high levels of fat (including saturated fats), sugar, salt and preservatives. This comprehensive overview of products, together with information from documents and media items, provides a focal point for product evaluation as part of the CHIA. Links are identified between the growing access and availability of McDonald’s products and its home-delivery service. As a nutritionist argues:
It just makes it easier for people to get food that is high in saturated fat and high in salt and it encourages people to have meals that lack in vegetables [
68].
McDonald’s marketing strategies
McDonald’s engages in a range of creative and integrated marketing strategies for product promotion. It frames these within responsible marketing approaches to children:
We have a genuine commitment to advertising appropriately and continue to review the research in relation to the impact of advertising on childhood obesity [
55].
The scope of marketing including to young people through integrated marketing strategies was noted across the qualitative data sets, including McDonald’s corporate literature [
69]. Integrated Marketing Communication (IMC) is arguably the major communication development of the last two decades and a relatively new concept in corporate strategy [
70]. As revealed on McDonald’s Australia website, IMC does not reflect a single initiative but a cumulative effect that works to persuade children and young people, in particular, to make particular brand choices [
71].
A medical specialist argues that using a Ronald McDonald clown mascot as an “ambassador for health” in children’s hospitals deflects criticism from health-damaging products, as obesity has been identified as the most urgent health challenge facing paediatricians [
72]. Children under eight years of age are cognitively incapable of understanding the commercial imperative of television advertising and are particularly vulnerable to its persuasive techniques [
73]. Obese children have a 25–50% chance of becoming obese adults; increasing to 78% for older obese adolescents [
74].
Consumer marketing documents also demonstrate how important cause-related marketing is to McDonald’s operations. This is described as “taking a brand and adding emotional character and empathy” ([
75] p. 284). Consumers are more loyal to companies who act in a positive manner, but cause-related marketing involves a range of loyalty and incentive marketing tactics designed primarily to facilitate the corporation’s financial success [
75].
McDonald’s Australia has also built strategic links to bolster its charitable purposes, including through Ronald McDonald House Charities, Victoria Police, Vinnies CEO Sleep Out, Clean up Australia Day, and Earth Hour. This allows for an ascribed ‘halo effect’ when a company that markets unhealthy products tries not only to look good, but simultaneously seeks to distract from its unhealthy image. This is achieved by promoting positive images of its products and operations through its support for ‘worthy’ causes. As the burden of obesity falls most substantially upon disadvantaged communities [
72], this is an important health equity impact.
Understanding the health and equity impacts of McDonald’s activities within the country: (CHIA level C)
In this section we review positive and negative aspects relating to health and/or health equity across five domains: 1) McDonald’s workforce and working conditions, 2) social conditions, 3) environmental conditions, 4) economic conditions, and 5) health-related behaviours. A summary of our findings concerning actual or potential health and equity impacts across these five domains are summarised in in Table
2.
Table 2
Health and equity impacts of McDonald’s operations
Work and workforce conditions |
• McDonald’s invests heavily in employment and training, is strongly committed to an inclusive workplace and occupational health and safety standards. |
• McDonald’s is a respected national training provider and provides high level youth employment. However, McDonald’s does not pay penalty rates and many jobs are filled by casual and part-time workers with the low-levels of unionisation across the fast food industry. |
Social conditions |
• McDonald’s provides a low cost option for financially struggling families and a venue for inexpensive social interaction. |
• However, location near schools has potential impacts on easy access to unhealthy food options and childhood obesity. |
• Concerns have been raised over the negative impacts on housing prices in the vicinity of McDonald’s new outlets, and over impacts on local cafes and other services due to the comparative size and scale of McDonald’s operations. |
• Negative health impacts reported include physical and psychological effects from community efforts to stop the proliferation of new McDonald’s outlets. |
Environmental conditions |
• McDonald’s ‘Five Pillars’ sustainability framework is a positive initiative. |
• However, resource-intensive operations would impact on global climate change both directly and indirectly, with externalisation of costs to the community. |
• High level littering, food wastage, and impact on social amenity are other negative aspects. |
• There is potential for ‘greenwash’ as part of corporate relations strategies and its links to community group abatement projects. |
Economic conditions |
• McDonald’s provides positive impacts from employment; including in their outlets and supply chains and from construction and infrastructure provision. |
• Franchises provide positive economic benefits through a proven business model. |
• However, there is externalisation of costs to the public from profit shifting, tax havens, and service fees paid back to USA headquarters. |
• The health costs of non-communicable diseases and environmental impacts from McDonald’s operations are externalised to the community. |
Health related behaviours |
• Consumption of McDonald’s cheap and palatable but ultra-processed food and sugary drinks can contribute to increased levels of overweight and obesity, which is negatively correlated with socio-economic status. |
• There is a link between consumption and McDonald’s sophisticated and integrated marketing strategies, including from the influence of the ‘halo effect’ and ‘health washing’. |
• Bundled products, drive through outlets and home delivery also influence consumption patterns. |
• There is an association between consumption of McDonald’s products, lower socio-economic status, and children and young adults; with implications for health equity |
Workforce and working conditions
The qualitative data sets all contributed to informing the CHIA in relation to McDonald’s Australia’s employment conditions. They provided incidental information on comparative wages for McDonald’s workers across a range of countries which contextualises Australian workforce issues.
Employment is a critical determinant of health providing both financial and non-material benefits [
76]. McDonald’s corporate literature, documents from the Fair Work Commission, the Fair Work Ombudsman and several media items informed the CHIA on a range of positive aspects of McDonald’s workforce and working conditions. McDonald’s Australia’s formal employment agreement provides benefits to workers by regulating wages and conditions. These are negotiated between the Fair Work Commission, Australia’s national workplace relations tribunal, and the Shop Distributive and Allied Employees Association Union and provide a level of job security for the corporation’s Australian employees [
77].
We collected information on workforce age and salary levels, and high level youth employment, offering the benefits of a first job [
77]. McDonald’s Australia provides employment to 90,000 individuals and spends over $1billion annually on wages, salaries and bonuses [
26]. McDonald’s own corporate literature and media items also highlight its large Australian investment in employment and high quality workforce training as an Accredited Training Provider for Certificate level qualifications and Diplomas and Advanced Diplomas of Management.
Unemployment is one of the constellation of disadvantages experienced by Aboriginal people [
78] and McDonald’s is committed to developing structures supporting Indigenous Australian workers; as well as people living with disabilities. McDonald’s literature and a newspaper article note the corporation’s inclusive, non-discriminatory workplace with a high percentage of women in leadership roles. Fifty six per cent of management positions are held by women, which far exceeds the eight per cent of senior female leadership roles in ASX 200 companies [
79].
Occupational illness and injury is a critical public health issue due to the pain and suffering of individual workers and economic costs to workers, employers and the broader community [
78]. McDonald’s website explains its commitment to, and ongoing improvement of, occupational health and safety measures through monitoring Lost Time Injury Frequency Rates (LTIFR) and its compliance with the law [
80]. The Fair Work Ombudsman endorses McDonald’s Australia for providing “an opportunity for young people to learn skills that they can apply throughout their working lives” [
81]
. This positive view was also endorsed by a respondent who was a former McDonald’s franchisee.
However, most young people who work in McDonald’s are engaged in lower skill activities. One civil society actor opposing the proposal for a new McDonald’s outlet provided a different perspective on the mainly casual employment offered by McDonald’s:
…look they always claim they offer 60, 80 or 100 jobs. What they don't say that it’s rarely full-time jobs, there's really only a handful of full-time jobs at every McDonald's outlet, other than that, it's school kids or students that work a few hours here and there for $9 an hour.
Other contested views on McDonald’s Australia’s employment conditions were expressed in documents, media items and interviews which reported variously on specific, albeit limited, incidents in relation to staff safety issues, food production practices, occupational health and safety incidents; and the fact that McDonald’s does not pay penalty rates [
82]. This form of remuneration mediates precarious employment: one of the health-damaging features of the growing increase in non-standard forms of work which includes the job insecurity of low paying and often insufficient work.
The Fair Work Ombudsman confirms that most of McDonald’s Australia’s 90,000 workers are casual [
83]. Casualization is one facet of precarious employment, with casual workers lacking job security beyond a particular shift [
84]. Low-level unionisation across the fast food industry more generally is characterised by high levels of casual and part-time workers who are typically young and poorly informed about workplace rights, and by high staff turnover. Even with these constraints Australian regulations on wages and conditions covering McDonald’s Australia’s workers are more protective in comparison with some other jurisdictions with less stringent regulations; or compared with being unemployed.
Social conditions
Recently there has been greater acknowledgement of the role that the built environment plays in influencing healthy outcomes related to dietary choices [
85]. This aspect of the health impact framework relates to the positive and negative impacts of McDonald’s operations on local community life and on local goods and services. McDonald’s own literature presents the ways in which the corporation interacts with and supports local communities through a range of sponsorships and corporate philanthropy initiatives. Mc Donald’s website states that as one of its seven core values:
We give back to our communities We look after the locals
We take seriously the responsibilities that come with being a leader. We help our customers build better communities, support RMHC®, and leverage our size, scope and resources to help make the world a better place [
55]
.
McDonald’s does not directly address its benefits to social life, but images of happy families at their restaurants in their advertising material suggest they like to represent the restaurants as a convivial place for family gatherings. Their website highlights a range of family activities, including catering for children’s birthday parties and a range of other in-house and online games and playground equipment. McDonald’s remains a low-cost option for financially struggling families and a “fun” environment for children; especially those whose families have fewer options.
Civil society activism against McDonald’s impact on local communities
Positive social impacts were countered, unsurprisingly, by civil society activists we spoke to; highlighting the negative effects of McDonald’s on their local communities. The analogy of ‘David vs Goliath’ in portraying the perceived power disparity between McDonald’s and the various local communities was a recurring theme.
Stress and anxiety
Activists noted that engaging in civil society protests against McDonald’s could have a negative impact on their mental well-being which led to stress and anxiety resulting from perceived loss of control. In the Supreme Court McDonald’s sought unspecified damages and costs and wide-ranging injunctions against protesters at Tecoma Victoria for either remaining on or entering the site and for using social media to prosecute their campaign [
86,
87]. One campaigner against the expansion of McDonald’s outlets argued:
The problem is McDonalds have got very deep pockets and a lot of money, so that scares us… we don't have the funds to fight… it feels like a big David and Goliath battle, because they have got powerful lawyers and deep pockets, and they'll keep pushing, pushing.
Stress due to potential litigation by McDonald’s was noted by another activist:
When you’re dragged into the Supreme Court with the prospect of losing your house you begin to wonder whether you’ve taken on the wrong enemy.
One Western Australian campaigner spoke of the personal experience of the stress-related toll on campaigners who were often local residents:
I find the whole process very stressful. So mental health is an issue just as much as physical health. The fear of the unknown is stressful.
Economic impacts
Another activist noted economic-related stress:
Aside from all this, there is a known impact to property prices… So that is a stress to people.
We found that activists also had a fear of the economic impact of strategic lawsuits against public protest (‘SLAPP’ suits) [
2], and these various accounts support Freudenberg’s (2014) argument of a power imbalance between McDonald’s and local communities in respect of litigation. An interviewee also spoke of the potential economic impact that McDonald’s outlets may have on local goods and services:
It’s a cafe area and small business area and we’ve got a number of wonderful restaurants so that McDonald’s ability to impact on the income of those businesses was also of great concern.
The power disparity between McDonald’s Australia and the local communities in which it seeks to embed its operations highlights important impacts on health and equity.
Environmental conditions
Environmental conditions considered as part of the CHIA relate to impacts on the natural environment, including on ecological systems, land and water; pollution and loss of amenity. McDonald’s corporate literature indicates many positive environmental sustainability measures. The corporation has adopted the Five Pillars Sustainability Framework as part of its CSR initiatives. This framework covers corporate, restaurant and sustainable operations, advocacy and partnerships, and culture and communications. Environmental themes are included under each of the Five Pillars [
26]. McDonald’s explains:
We have an environment policy in place that underpins all of our decisions and actions… we operate within a sustainability framework which is designed to assist the entire McDonald’s business to define and deliver appropriate initiatives against the major environmental themes of five identified sustainability pillars [
51].
McDonald’s website also highlights a range of initiatives including energy reduction, pollution abatement and ‘clean streets’ campaigns which ameliorate negative environmental impacts.
McDonald’s Australia’s website also notes other pollution abatement strategies including organic waste collection, and conversion of used cooking oil to biodiesel fuel for delivery trucks in Victoria. McDonald’s has also been the recipient of packaging awards from the Australian Packaging Covenant for demonstrating a commitment to environmental sustainability and efforts to minimise waste [
88]. It uses Rainforest Alliance certified coffee produced under standards intended to improve health by protecting the environment and the rights of workers in other countries [
89].
Other data highlighted a different perspective on McDonald’s environmental impacts; including potential “greenwashing” or cleaning the corporate image by showing concern for the planet and welfare of all as part of a corporate relations strategy [
90]. McDonald’s message that reducing and taking responsibility for waste and environmental degradation by supporting “green” groups including Clean Up Australia and Earth Hour is arguably a reactive stance; conflicting with corporate business operations that prioritise profit making and increased growth and consumption [
91].
Less visible negative environmental aspects include the impacts from transportation, refrigeration, and carbon and ecological footprints. These impact on global climate change; including the direct risks of respiratory illness, thermal extremes, natural disasters, ozone layer depletion; and the indirect effects of communicable diseases and food security [
92]. McDonald’s operations also add to resource intensive meat and dairy production and animal husbandry under which 70% of global agricultural land is appropriated for animal rearing. This leads to soil erosion, freshwater pollution, exorbitant water use, high pesticide levels, and sediments threatening aquatic environments [
93], and contributes to global warming.
The Australian 2011/2012 National Branded Litter Study cited McDonald’s as the highest proportion of all litter items recorded across Australia (12.8%, up from 9.85% in 2007/2008) [
94]. Litter is an environmental crime, causing harm to animal and marine life, blockages to storm water system and flooding. Litter was a major environmental issue for civil society actors opposed to proposed new McDonald’s outlets, especially in tourism areas. One respondent argued:
They’re the number one brand litter source in Australia, McDonald’s. One in every eight pieces of litter bears McDonald’s brand and I can’t help but believe that that the heavy branding on all of their products…is sort of a secondary avenue of advertising.
A former franchisee outlined McDonald’s imperative for adopting their range of litter abatement strategies:
They want to be able to tell a story: “Well, McDonald’s Australia doesn’t litter, unfortunately the consumers do, and it’s their way of saying we’re supporting that by doing biodegradable products and supporting activities like Clean up Australia Day”.
From a health equity perspective, the negative impacts from littering must also be understood within the context of greater numbers of fast food outlets being situated in lower socio-economic areas. Massive food wastage [
95] impacts on natural resources, compromises sustainable development, and has implications for intergenerational inequity [
96].
Economic conditions
This aspect of CHIA level C refers to the impact on economic conditions from McDonald’s Australia’s influence on the national or local economy, local supply and purchasing systems, and employment. McDonald’s Australia’s own business profile provides information on the level of value-adding from their operations, the number of jobs created with each new outlet, high level support for local producers, and its contribution to Australia’s gross domestic product (GDP). As well as being a large employment provider, McDonald’s sources products from 9000 Australian suppliers, invests more than $40 million every year in training crew, restaurant managers and corporate staff, and supporting the administrative operation of the publicly-funded Ronald McDonald House Charities [
97]. A former McDonald’s franchisee explains that there are positive economic impacts accruing from the corporation’s infrastructure upgrades, such as those to promote sustainable watering systems for outlet landscaping.
These positive economic factors are mediated by actual and potential loss of state revenue through business profit shifting as part of McDonald’s taxation strategy. A 2015 international report provided important insights into McDonald’s taxation strategies both globally and nationally, and contextualised Australian taxation arrangements within its global operations:
McDonald’s uses royalty payments from franchisees and foreign subsidiaries in major markets to route profits to tax havens. These strategies may have allowed it to avoid up to US$1.8 billion in tax in those markets in the years between 2009 and 2013, including €1 billion across Europe and AU$497 million in Australia [
98].
The McDonald’s material we examined showed that tax minimization, through the way the company is structured, was part of their Australian business model and profit seeking as outlined in an Australian case study included in a report on McDonald’s international taxation strategies [
64].
Corporations including McDonald’s may also cause negative economic and associated health impacts to the extent that legal corporate entities are able to externalize, i.e. shift to consumers, taxpayers, or society as a whole, the real costs of production or consumption of their products. The economic impact of the cost of externalities produced by McDonald’s include the cost burden of chronic disease and dealing with environmental waste. As corporations are not required to pay such costs, the public subsidizes increased profits, which in turn leads to increased production; magnifying the adverse impact on population health [
99]. The disease and cost burdens associated with obesity, overweight and chronic diseases in 2008 in Australia were calculated to be $58.2 billion; comprising $8.3 billion in direct financial losses and $49.9 billion in net costs of lost wellbeing [
100].
The Australian Bureau of Statistics reports that in 2014–2015 63.4% of Australian adults and 27.4% of children were overweight or obese [
101]. McDonald’s website states its responsibility towards public health:
We’re concerned about issues such as obesity, improving our diets, our own health and the health of our children. McDonald’s Australia believes that as the country’s largest and best known name in the Quick Service Restaurant industry, it has a responsibility to take a leadership role in regard to the issue of public health in this country [
102].
Daube notes, however, that the food industry is under pressure from shareholders and others to act aggressively in the pursuit of profit [
103]. For the population to lose weight, companies must sell less food containing high fat and high sugar. This pits the fundamental purpose of the food industry against public health goals [
104]. Despite some positive changes to their products McDonald’s website shows that they still offer many ultra-processed and energy dense products with high levels of sugar, salt and fat [
67].
However, as McDonald’s products are always a part of an overall diet, it is difficult to make a causal connection, but there is an association between growth in fast foods and population obesity in Australia, and many commentators link the two. A Melbourne Australia study suggested that socio-economic status and environmental determinants (density of fast food outlets) interact to create environments in which poorer people have increased exposure to energy dense foods [
105]. Australian research on choices of fast food restaurants found that people accessing McDonald’s are often those who are travelling or “out and about”. It suggested that this may be due in part to the convenience of the high numbers of outlets, but also a perception that this was the only option for many people [
106]. As one respondent maintained:
The more affluent families tend to cook better foods at home and the less affluent tend to get a McDonald’s meal, or similar, because it’s cheap and it’s accessible… If you’re a struggling mum you can go to McDonald’s and get a meal for a toddler for $2…You’re probably thinking “I’ve put food in my child’s belly” and that’s really sad….
The National Health Performance Agency notes that the six suburbs in Western Sydney to which McDonald’s home delivers has the second highest number of overweight or obese adults [
107]. Media items flagged McDonald’s strategy of trialling its home delivery service in one of the most disadvantaged areas in Sydney, with one of the highest levels of obesity [
108]. Other issues arising in this CHIA impact area related to food consumption and health-related behaviours are that “drive throughs” target ease of consumption; and that bundled foods are sold more cheaply.
Spatial distribution of access to outlets – implications for health equity
To inform the CHIA a spatial and socioeconomic analysis of McDonald’s restaurants in Australia was conducted using Geographic Information System (GIS) technology at the Statistical Area 2 level (SA2s) using the ARCMap facility in ARC GIS and CartoDB [
53]. SA2s are medium sized general purpose spatial units constructed by the Australian Bureau of Statistics (ABS) representing a community that interacts together socially and economically [
109]. The number of persons per McDonald’s restaurant for Socio Economic Index for Areas (SEIFA) quartiles using the Index of Relative Socio-economic Disadvantage (IRSD) are reported in Table
3.
Table 3
Number of persons per McDonald’s outlet by age group and quartile of SEIFA score (IRSD)
1 (518) | 265 | 19,197 | 2,559 | 2,531 | 3,772 |
2 (516) | 266 | 19,764 | 2,507 | 2,542 | 4,018 |
3 (526) | 217 | 24,887 | 3,178 | 3,136 | 5,330 |
4 (539) | 176 | 32,443 | 4,126 | 4,192 | 6,659 |
Total (2099) | 924 | 23,220 | 2,988 | 2,993 | 4,759 |
McDonald’s outlets were slightly more likely to be located in areas of lower socioeconomic status. The socio-economic data presented in the table also identify the main consumer age groups from a fast food marketing and public health perspective - children (0-9 and 10-19) and young adults aged 20-34 years. The distribution shows that the bottom half of the socioeconomic distribution has fewer children per restaurant; in other words there is more market penetration in the lower socioeconomic quartiles [
110]. The difference between the bottom and top quartiles is most stark; especially for the 20–34 age group. The mean SEIFA (IRSD) score for Australian SA2s which have a McDonalds restaurant is 988 (st dev = 70.7,
n = 924). The mean SEIFA score for SA2s without McDonalds restaurants is 1002 (st dev = 86.6,
n = 1495). This difference is statistically significant (t = 4.3,
p < 0001), suggesting an inverse relationship between the location of McDonalds outlets and socioeconomic status.
Discussion
This paper set out to answer a question on the extent to which it is possible to document the health effects of a transnational corporation in one country, Australia, using a CHIA framework and McDonald’s as the pilot. Actual and potential positive health outcomes are identified in McDonald’s investment in high levels of employment and training, and its inclusive, non-discriminatory workplaces. McDonald’s Australia’s workforce conditions, bolstered by Australian employment regulations, guarantee a level of worker protection that remains unavailable in some other jurisdictions. McDonald’s outlets also provide many opportunities for affordable social interaction; especially for people with fewer options. The corporation engages in CSR, shared value and philanthropic initiatives that provide public benefits.
However, there are potential negative health impacts from McDonald’s ultra-processed food; its strategic industry alliances that facilitate corporate influence over food and advertising regulation; the loss of state revenue from its taxation strategies; and its health and environmental costs that are externalised to the community. Other detrimental impacts relate to the power disparity between McDonald’s Australia and the local communities who oppose more fast food outlets. Although the corporation provides high level employment and training for younger age groups this is on lower wages and less secure conditions. It therefore reveals a mixed picture of employment in respect of the CHIA, and highlights a challenge for countries seeking increased employment opportunities, including for young people, without bearing the negative imposts from unhealthy food. On balance, positive impacts are outweighed by the negative impacts, including the potential contribution to high levels of obesity and chronic disease, the impacts of aggressive marketing to children and young people, and financial strategies resulting in a significant loss of revenue for health and social infrastructure.
The CHIA revealed regulatory shortcomings in respect of self-regulation governing advertising and marketing, especially to children and young people. It identified constraints in local planning in different Australian jurisdictions, and taxation structures that are enabling for McDonald’s. The implications from findings at all levels of the CHIA are the need for rigorous national and supra-national policies [
48]. Voluntary codes for TNC operations have little public accountability, are difficult to reinforce other than by negative publicity, and divert attention away from legal compliance [
7]. Realistic policies will go beyond information and education to include fiscal and statutory constraints [
27]. To mediate negative health impacts, different marketing approaches are also needed, food must be healthier, and efforts made to better address the corporation’s environmental footprint.
One limitation of the research was the decision of McDonald’s Australia and the industry sector to not participate in the interviews which would have provided more nuanced perspectives of the information included in their corporate literature. This is a challenge, and alternative strategies are needed; for example, having corporate actors on the research team with specified roles. While the refusal of McDonald’s and other industry representatives to participate was limiting, it was still possible to gain a corporate view from publicly available sources. There are many evidence gaps on equity impacts, and social impacts that rely on the perceptions of local actors prior to new McDonald’s outlets being established, even though these raise serious concerns. The research was designed to include a range of specific search terms. The use of an alternative strategy may have identified further information to support the postulated potential social impacts which are not verified in the data.
There are also a number of assumptions that have not been made explicit but underlie the structure of the study. Firstly, there are no clear links between consumption of McDonald’s products, chronic disease, and obesity and other health problems, although this seems likely. There is also an assumption that most fast food is consumed through major chains with little attention to the role of the many local food fish and chip, pizza and hamburger shops that are often closer and more convenient for people; especially for those without cars. It must also be acknowledged that a large proportion of sugary drinks are purchased in supermarkets for home consumption; not only from fast food outlets.
The CHIA is not a regulatory tool that is required in order to act; there was no specific policy, proposal or decision point it was trying to influence. It was not a community led process, nor was it clearly an advocacy process but this seems to be its most likely use. This in turn meant that processes for engagement, governance structures, weighting of evidence and processes for managing conflict or disagreement did not need to be in place. The process issues of conducting potentially contested findings could not be addressed/explored.
The lessons we have learned about challenges for conducting a CHIA include recognising the need to study a TNC globally by exploring its operations internationally, nationally, and locally. This allows for comparing practices (e.g. wage levels) across different jurisdictions. We identified how important this is but recognise that it would require much larger budgets and major research grants. This pilot study confirmed the feasibility and usefulness of the CHIA framework in gathering and assessing impacts of TNCs on health in a structured and systematic way.
Acknowledgements
The authors thank Dr Lisel O’Dwyer for conducting a Spatial and Socioeconomic Analysis of McDonald’s Restaurants in Australia.
The authors also thank the three anonymous reviewers who provided very helpful comments on this article.
Dr Julia Anaf is a Research Associate with the Southgate Institute for Health, Society and Equity at Flinders University. She is currently researching the intersection between transnational corporations and public health, and has co-authored two related peer-reviewed articles.
Professor Fran Baum AO is a Matthew Flinders Distinguished Professor of Public Health and Director of the Southgate Institute of Health, Society and Equity at Flinders University. Professor Baum is a Fellow of the Academy of the Social Sciences in Australia, and one of Australia's leading researchers on the social and economic determinants of health. In 2008 she was awarded a prestigious Australian Research Council Federation Fellowship focusing on development of effective government and community responses to social determinants of health inequity and social exclusion. She holds several other national competitive grants investigating aspects of health inequity, and has an extensive teaching career in public health.
Dr Matthew Fisher works as a Senior Research Fellow at the Southgate Institute for Health, Society and Equity at Flinders University. Currently he works full-time as a researcher on the NHMRC Centre of Research Excellence – Health Equity, a collaborative project involving researchers at Flinders University, ANU, University of Sydney, University of Ottawa, and partnering with the Lowitja Institute. His research focuses on questions of how to address social determinants of health and health equity more effectively in public policy. He has a particular interest in social impacts on chronic stress and mental illness, and their implications for public policy and political ethics. Matt completed a PhD in political philosophy at Adelaide University in 2010. Previously, he has worked as a policy and research officer in the community housing sector. He has a long-standing commitment to values of social justice and environmental sustainability.
Associate Professor Elizabeth Harris is Senior Research Fellow in the Centre for Primary Health Care and Equity. She is the foundation director of the Centre for Health Equity, Training Research and Evaluation (CHETRE) at Liverpool in south western Sydney from 2000 to 2011. Originally trained as a social worker and teacher, she has worked as a clinician, health service manager, tertiary educator and public health researcher. Her principle research interest is in better understanding and intervening to address health inequity. The specific foci of her work include unemployment and health, child health, interventions in disadvantaged communities and the promotion of healthy public policy especially through equity focused health impact assessment (HIA). She led the NSW Health HIA capacity building project for 5 years. She currently leads an Australian Primary Health Care Research Institute project on the usefulness of EFHIA in planning afterhours care by Medicare Locals. She is currently conducting several EFHIAs for the Sydney Local Health District. She is a chief investigator on the NHMRC funded project evaluating Health in All Policies.
Professor Sharon Friel is Director of the Regulatory Institutions Network (RegNet) and Professor of Health Equity, Australian National University. She is also Director of the Menzies Centre for Health Policy ANU. She is a Fellow of the Academy of Social Sciences Australia and an ANU Public Policy Fellow. In 2014 she was named by her international peers as one of the world’s most influential female leaders in global health. She is the Co-Director of the NHMRC Centre for Research Excellence in the Social Determinants of Health Equity. In 2010 she was awarded an Australian Research Council Future Fellowship to investigate the interface between health equity, social determinants and climate change, based at the National Centre for Epidemiology and Population Health, ANU.