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 supplier’s employee who walks through abarn, carelessly lighting lamps and letting flames fall on the terrified birds. The air inside thesefilthy barns reeks of ammonia fumes, making it difficult for the birds to breathe. No one with agrain 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 andarsenic chemicals to fatten them quickly.”3

- Nanjundaswamy.4

PROTEST AGAINST KFCOn August 20, 2003, a five-foot tall chicken complete with an ensemble of feathers and beakhobbled on a pair of crutches outside Kentucky Fried Chicken’s (KFC) Indian outlet in Bangalore.The chicken was brought by PETA (People for Ethical Treatment of Animals) activists, whocarried placards reading, “Quit India” and “Stop Playing Fowl” (a pun on “Foul”). The chickenwas placed at the centre and a peaceful protest was held against the alleged ill treatment of birds inKFC’s poultry farms. Media persons were called to give the demonstration a wide coverage (ReferExhibit I for a visual on the protest by PETA activists).Explaining the rationale behind the protest, Bijal Vachcharajani, special projects coordinator ofPETA, said, “Ours is the land of Gandhi. Just as 61 years back our leaders gave a call forcolonizers to quit India, we too are saying we will not tolerate cruel multinationals.”5 On the 61stanniversary of the ‘Quit India’ movement,6 PETA India wrote a letter to the Managing Director ofTricon Restaurant International, the parent company of KFC, asking them to close their sole KFCoutlet in India. They got no reply. PETA activists decided to protest against KFC by carryingcrippled chicken, which represented the birds suffering in the KFC’s farms.PETA claimed that after two years of intensive campaigning to increase animal welfare standardsin poultry farms, other foreign fast food restaurants operating in India like McDonald’s7 andBurger 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 chickencampaign became the precursor for more intensive protests. PETA’s was one of the many showsof protest against KFC’s Indian outlet.

BACKGROUND NOTEKFC was founded by Harland Sanders (Sanders) in the early 1930s, when he started cooking andserving food for hungry travellers who stopped by his service station in Corbin, Kentucky, US. Hedid not own a restaurant then, but served people on his own dining table in the living quarters ofhis 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 basiccooking technique of chicken. Sanders’ fame grew and he was given the title Kentucky Colonel bythe state Governor in 1935 for his contribution to the state’s cuisine.Sanders’ restaurant business witnessed an unexpected halt in the early 1950s, when a newinterstate highway was planned bypassing the town of Corbin. His restaurant flourished mainlydue to the patronage of highway travellers. The new development meant the end of this. Sanderssold 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 hisunique 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 asmany restaurants as possible and cooking batches of chicken. If the restaurant owners liked hischicken, he entered into a handshake agreement that stipulated payment of a nickel9 for each plateof 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, heremained the public spokesperson for the company. KFC grew rapidly under the new owners andissued 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 theworld.Heublein Inc. was acquired by Reynolds Industries Inc. (now RJR Nabisco Inc.) in 1982. InOctober 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 ofthem into an independent restaurant company called Tricon Global Restaurants in January 1997. InMay 2002, Tricon’s name was changed to Yum! Brands Inc.10 to reflect its expanding portfolio ofbrands.By 2004, KFC emerged as one of the world’s most popular chicken restaurant chains. With morethan 11,000 restaurants in nearly 80 countries, KFC enjoyed the patronage of nearly eight millioncustomers everyday all over the world. KFC specialties included Original Recipe, Extra Crispy,Chunky Chicken Pot Pie, Twister and Colonel’s Crispy Strips chicken with home-style sides.

KFC’S ENTRY IN INDIAForeign fast food companies were allowed to enter India during the early 1990s due to theeconomic liberalization policy of the Indian Government. KFC was among the first fast foodmultinationals 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 classpopulation, with a trend of families eating out. It was considered India’s fastest growingmetropolis in the 1990s. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hutoutlets in the country in the next seven years. However, KFC got embroiled in variouscontroversies even before it started full- fledged business in India.When the issue of granting permission to multinational food giants to set up business in thecountry came up for discussion in the Indian parliament, some members from the oppositionparties were vocal in their displeasure. They criticized the government’s decision saying that inIndia, where millions of people could not afford one meal per day, the government was invitingmultinationals to establish fast food chains, which only the upper middle and affluent classes couldafford. They pointed out that a piece of chicken was sold for the equivalent of a little more than $1at KFC, more than the daily per-capita income in India.Leading economists vigorously opposed the idea of multinationals in the food business enteringIndia 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 bedetrimental and nutritionists highlighted the high rates of obesity, hypertension, heart disease andcancer (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 wereunanimous in their opposition to foreign fast-food joints. They argued that traditional Indianrecipes such as “tandoori chicken”11 were more nutritious than the junk-food alternatives.PROBLEMS FOR KFCFrom the very first day of opening its restaurant, KFC faced problems in the form of protests byangry farmers led by the Karnataka Rajya Ryota Sangha (KRRS)12. The farmers leader,Nanjundaswamy, who led these protests, vehemently condemned KFC’s entry into India, saying

that it was unethical to promote highly processed ‘junk food’ in a poor country like India withsevere malnutrition problems. Nanjundaswamy expressed concern that the growing number offoreign fast food chains would deplete India’s livestock, which would adversely affect itsagriculture and the environment. He argued that non-vegetarian fast-food restaurants like KFCwould encourage Indian farmers to shift from production of basic crops to more lucrative varietieslike 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 multinationalsand the Westernization of local agriculture. National banks, insurance companies, political partiesand non-governmental organizations supported the convention. All parties attending theconvention 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 thateconomic liberalization policies would attract multinationals and their opening businesses wouldcreate employment and develop infrastructure. However, Nanjundaswamy differed with thegovernment’s contentions. He argued that fast-food companies brought jobs only for a handful ofeducated people and displaced the poor majority. He cited the example of VenkateshwaraHatcheries,13 which supplied KFC with broilers after closing down its restaurants in Mumbai andPune as part of a deal with KFC.On January 30, 1996, KFC’s 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 leaveIndia. KFC’s billboards were destroyed across the state by agitators. Following the violence,several farmers were imprisoned. On February 03, 1996, Nanjundaswamy was also jailed oncharges of looting, attempt to murder and other offences.Despite these setbacks, KRRS did not relent and continued its protests against Western fast foodjoints in general and KFC in particular. KRRS maintained that the entry of Western fast foodchains 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 steptowards the destruction of India’s food security.Nanjundaswami also said that apart from the threat to local agriculture, another negative aspect offast-food chains like KFC was large-scale factory farming of chickens. He maintained that thechicken served by KFC was full of chemicals because the birds were reportedly being givenhormones, antibiotics and arsenic to fatten them quickly. He called the chickens “chemicallypoisoned.”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 raisedand refried several times. Ecologists also joined the farmers’ protests by saying that the opening offast food joints meant more trash, including plastic lids, paper cups, bags and extra condiments, onthe highways and sidewalks.

NON-CONFORMITY WITH FOOD PRODUCTS REGULATIONSIn August 1995, just a couple of months after launch, KFC’s Bangalore outlet faced a major crisiswhen Municipal Food Inspectors visited the restaurant and found that KFC’s ‘hot & spicy’seasoning contained nearly three times more monosodium glutamate (MSG, popularly known asAjinomoto a flavor enhancing ingredient) than allowed by the Indian Prevention of FoodAdulteration 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, itsteratogenic 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. Childrenunder 12 were are also advised against taking MSG as it retarded brain development. The IPFAAfixed an MSG ceiling in fast foods at one per cent. The Food Inspectors’ examination, followed by

laboratory tests and analysis found that KFC’s chicken contained 2.8 per cent of MSG.The MSG controversy reached a crescendo on September 13, 1995. The Bangalore CityCorporation revoked the restaurant’s license and directed the police to close it on the ground thatKFC not only exceeded the legal MSG limits but had also failed to disclose what seasoning it usedin its preparations. It charged KFC with serving food that was ‘adulterated, misbranded and unfitfor human consumption.’ Refuting the charges, Sandeep Kohli, managing director of KFC Indiasaid, “We serve the same product in Bangalore as we do in our over 9,000 restaurants in 78countries. 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 toother restaurants in Bangalore.The closure orders enraged both the local management of KFC and their US bosses. PepsiCo’sSenior Research Department argued that India lacked the laboratory equipment needed toaccurately test the level of MSG in food products. Meanwhile, to test MSG levels, an Indianbusiness weekly – Outlook - bought samples of fried chicken from KFC and took them to the FoodResearch and Analysis Centre of the Federation of Indian Chambers of Commerce. The analysisshowed 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 labswere not well-equipped to measure the additive accurately.KFC’s management approached the Karnataka State High Court and obtained a stay order againstthe closure orders issued by the Bangalore City Corporation. The judge said the restaurant couldoperate as usual till full court hearings. After securing the stay order, KFC’s managementannounced at a press conference that all they wanted was to let customers decide and if the latterdid not like the company’s products, it would anyway have to close the shop. But, soon afterreopening, KFC had to face the wrath of farmers who attacked the restaurant and destroyed thebillboards 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, thenational capital, in October 1995. KFC’s management also announced that six more outlets wouldbe opened in Delhi by the end of 1996. However, in a couple of weeks, the Delhi outlet too facedprotests by a coalition of farmers, vegetarians and environmentalists. Within a couple of weeks oflaunch, the Delhi restaurant had to stop its business as health officials cancelled its license onNovember 06, 1995 on the grounds that the coating mix imported from the US contained sodiumaluminium phosphate (SAP)16, which was hazardous to human health. KFC sought redress fromthe Delhi High Court and argued that the food contained no harmful chemicals and that the amountof SAP, an ingredient in baking soda, was within the limits approved by the World HealthOrganization and the US Food and Drug Administration. The charges were withdrawn as KFCproved that SAP was used in small quantities in the baking powder and was not harmful. Therestaurant 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 permittedhigher levels of MSG in Indian food,17 which meant that KFC could continue its business. Theactivists retaliated by taking up other issues against KFC. The Swadeshi Jagran Manch (NationalAwakening Forum)18 began a probe into the hygiene conditions at the restaurant. An inspection byfood inspectors found flies buzzing around the kitchen and garbage cans just outside the restaurantpremises. The Municipal Corporation of Delhi served a closure order on grounds of hygiene andsanitation. Thus, the Delhi KFC outlet was closed within 23 days of re-opening.Later, KFC’s management decided to close the outlet permanently citing high rentals as the primereason. They said that the outlet was hit by high rents and the cost of doing business in Delhi wasnot in line with its worldwide standards. Apart from this, the main ingredient – chicken, was easilyavailable in the south, east and western parts of India, but not in the north. So, procuring chickenalso became an expensive proposition for KFC. Thus, the Bangalore restaurant remained the soleKFC 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 PETABy 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 longtime against KFC at the international level on the grounds that KFC was extremely cruel tochickens and did not care to provide even minimum hygiene for the birds at its factories. It ran aspecial website called ‘www.kfcfriedcruelty.com’ which detailed the inhuman treatment of thebirds in KFC poultry farms and the slaughter houses of the suppliers.PETA India also launched an extensive protest programme against KFC’s Indian outlet. It said thatdespite repeated appeals to the management, KFC had not cared to improve either the conditionsor the treatment of birds. PETA urged the Indian public not to go to KFC’s restaurant and askedthem to demand its closure in India. The protests grew rampant from 2003 onwards as thecompany did not budge. However, unlike the previous violent protests by the farmers, PETAdemonstrations were peaceful.PETA then started a mass education programme stating that it wanted to enlighten people aboutthe cruelty suffered by chickens at KFC poultry farms. ‘KFC stands for cruelty’ was the slogan ofPETA. Pamphlets with a graphic description of the cruelty were distributed. KFC’s spokespersonsdenied the charges and said the company was committed to the well-being and humane treatmentof chickens.To substantiate its allegations regarding KFC’s cruelty, PETA released a video documenting thedaily suffering of thousands of chickens in a factory farm in Venkateshwara Hatcheries in Punethat supplied chickens to KFC. The 10- minute video gave a telling description of the plight of thebirds with visuals. This was premiered at a news conference at Bangalore on October 09, 2003. Itshowed chickens stuffed into overcrowded warehouses, pushing each other for food, a barn litteredwith carcasses of chickens that had died of disease, dirty and injured chickens that never receivedany medication and chickens suffering at the hands of indifferent staff (Refer Exhibit III forpictures of birds shot by the camera).The video showed thousands of chickens crammed into sheds that stank of ammonia fumes fromaccumulated waste. The birds were forced to live for whatever time they were alive in the amountof 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 engineeredand 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'sdetailed 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 theslaughterhouse by lorry. The mode of transportation violated the legislative provisions regardinganimal transportation (Refer Exhibit V for the relevant provisions). Many birds died duringtransport. The birds were shackled upside down at the slaughterhouses. They were often fullyconscious when their throats were cut or when they were dumped into tanks of scalding hot waterto remove their feathers.The video contradicted KFC’s statements to the media that its supply farms strictly adhered toanimal welfare standards. PETA reiterated that “KFC stands for cruelty and we do not need thiscruel outlet in India. This cruelty must be stopped. All we are asking for is for reasonableimprovement on our list of demands or get out. I hope the people of India will join us.”20

THE AFTERMATHBy late 2003, PETA further intensified its campaign against the cruel treatment meted out tochickens 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 thecontinued cruelty of KFC in spite of repeated requests of PETA. The organization also had thesupport 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, whopromoted vegetarianism. Film actresses like Raveena Tandon and Ameesha Patel also took up thecause of animal abuse.Undeterred by the continued protests, KFC added three more outlets21 to its existing one atBangalore. KFC also announced a major expansion programme for 2005. Sharanita Keswani(Keswani), KFC’s Marketing Director, said that as the retail business was poised for a boom inIndia, they considered it the right time for expansion. Feeling positive about the flourishing mallsin all big cities, Keswani revealed that this time KFC planned to have a presence in prime locationsor in a mall where turnout would be assured.The company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata, Chennai andHyderabad, where mall culture was fast developing. PepsiCo also decided to concentrate on theexpansion of KFC since its other brand, “Pizza Hut”, had successfully established a strongfoothold in India.Vegetarianism was predominant and was a way of life in India. Many people ate non-vegetarianfood only occasionally and avoided it during festivals or religious occasions. KFC did not want toalienate the vegetarian community which was in majority in India. It decided to add morevegetarian and Indian items to the menu, in an effort to become attractive to both vegetarian andnon-vegetarian customers. Rather than affecting chicken sales, the presence of vegetarian dishes inthe menu was expected to make the brand more appealing to a wider section of consumers. Thediversification into vegetarian food was considered inevitable by the management to establishitself as a universal brand across the country.While KFC was busy planning extensive expansion, PETA conducted another demonstration atBangalore on February 17, 2004. The protesters held placards reading, “KFC quit India” and“Don’t let KFC roost in India.” They also distributed pamphlets stating that apart from the abuseof 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 theworld’s leading killer of chickens, KFC had the responsibility to take the lead in eliminating atleast 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 humanetreatment of chickens” and that they required their suppliers to follow the welfare guidelinesdeveloped by Yum! Restaurants International, US, along with leading experts, on their AnimalWelfare Advisory Council (Refer Exhibit VI for KFC’s Poultry Welfare Guidelines). Heemphasized 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 themulti-national until it changed its cruel practices or left India. The battle between KFC and PETAin India continued.