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Wed, May 10, 2006 - Page 10 News List

Disney to end pact with McDonald's after 10 long years

AGENCIES , LOS ANGELES

Citing concerns about children's health, Disney is to end its decade-long marketing pact with the McDonald's fast food chain, the Los Angeles Times reported on Monday.

The hamburger restaurant chain has paid Disney over US$1 billion over the past 10 years to tie its products to 11 Disney movies like Finding Nemo, The Incredibles and 101 Dalmatians, the newspaper said.

But family-focused Disney now wants to distance itself from fast food and its links to childhood obesity, and will end its deal with McDonald's following its two summer blockbusters, the animated movie Cars and Pirates of the Caribbean: Dead Man's Chest.

Disney declined to comment on the report. But Pixar Animation Studios chief Steve Jobs, who is now Disney's biggest shareholder, was quoted as saying recently: "There are ... some concerns as our society becomes more conscious of some of the implications of fast food."

Jack Daly, McDonald's senior vice president for corporate relations, said "The 10-year McDonald's Disney alliance is ending for sound business reasons on both sides."

"This was a mutual decision made more than a year ago -- a fact that is well known in the business world," he said.

Daly rejected a Los Angeles Times story that said Disney abandoned the pact because it does not want to be linked to junk food. The report was "based on Hollywood hearsay" and was "a misrepresentation of the truth," he said.

The report said that DreamWorks Animation SKG was also reconsidering its tie-in with McDonalds, and that for its upcoming movie Shrek III it wanted the overweight title character to be linked with McDonald's more healthy offerings, rather than its Chicken McNuggets and Big Macs.

Recent studies show that as many as 40 percent of young children in the US are overweight and that 20 percent could be categorized as obese. Fast food critics hailed the move by Disney as a potential turning point in US dietary health.

"I think it would have impact in contributing to the cultural change that is necessary," said J. Michael McGinnis, chairman of a National Academy of Sciences panel that just released a study showing how food marketing adversely affects children's diets.

"The committee thought it was important for the use of cartoon characters that appeal to children only to be used in the marketing of healthy products," said McGinnis

"It will put more pressure on McDonald's to change what they sell in Happy Meals," said Eric Schlosser, author of the bestselling book Fast Food Nation. "The obesity issue would be irrelevant if the food in the Happy Meals was healthy."

McDonald's has said it is addressing criticism raised by Schlosser and others. The companies had no immediate comment on the Los Angeles Times report.

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