Investors increase pressure to cut antibiotics use

By Oscar Rousseau

- Last updated on GMT

The European Parliament has cleared regulation to ban routine preemptive antibiotic use on farm animals
The European Parliament has cleared regulation to ban routine preemptive antibiotic use on farm animals

Related tags Finance Livestock Beef Lamb Pork Poultry

A $2bn coalition of investment firms have issued an antibiotics report as leading financial institutions grow increasingly concerned that overuse of livestock drugs could hit profits.

Some of the world’s largest food companies, including McDonald’s and Domino’s Pizza, are moving forward with plans to phase out antibiotic use in poultry, according to the new investor report.

The collation of 71 investment firms, which includes Aviva Investors and Coller Capital, came together in March last year to ask the world’s largest food companies to encourage their suppliers to reduce antibiotics.

Since last year, about 70% of companies have adopted polices in some form to stop the use of antibiotics in poultry. A rise of 20% since March 2016, according to the investor report.

Four-fifths (80%) of companies contacted by investors are actively working with their meat suppliers to monitor antibiotic usage. Yum! Brands, owner of Pizza Hut, KFC and Taco Bell, was the only company out of 10 that ignored requests for information.

'Growing public focus'

“There is a growing public focus on rising levels of antibiotic resistance and the risks it poses to public health systems and ultimately to portfolio value,”​ said Richard Keery, investment manager at Scotland-based Strathclyde Pension Fund.
The investor group now includes 71 financial institutions and published its antibiotic progress report in New York on Monday 20 March.

The European Parliament has already voted through regulation to ban routine preemptive antibiotic use on farm animals. The US Food and Drug Administration (FDA) has also recently published guidance on antibiotic use. Investors said the changing antibiotics policy landscape presented a financial risk for companies who failed to improve practices.

Jeremy Coller, founder of the FAIRR Initiative (a network of investor’s raising awareness of how factory farming can influence investment portfolios) and chief information officer at Coller Capital, said: “Investors are not immune to antibiotic resistance.

'Could lose $100 trillion'

“It’s hard to put a monetary cost on antibiotics becoming useless, but some estimate it could lose $100 trillion from global economic output, creating an enormous global financial and public health crisis.

“New regulation, shifting consumer preferences and trade restrictions are already driving a reduction in antibiotic use in livestock. The clear message to these companies is that their shareholders want to see meaningful action on antibiotics.”

The 10 companies written to by investors are: Brinker International; Darden Restaurants; Domino’s Pizza Group; JD Wetherspoon; McDonald’s Corporation; Mitchells & Butlers; Restaurant Brands International; The Restaurant Group; The Wendy’s Company; and Yum! Brands.

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