McDonald's sued over Happy Meal toys



PORTLAND //  A Californian mother-of-two and The Center for Science in the Public Interest are suing McDonald's Corp. to get the fast-food chain to stop using toys to market meals to young children.

They say McDonald's is violating several consumer protection laws by marketing its Happy Meals directly to young children because it exploits children's vulnerability.

"What kids see as a fun toy, I now realize is a sophisticated, high-tech marketing scheme that's designed to put McDonald's between me and my daughters," said Monet Parham, of Sacramento, California. "For the sake of other parents and their children, I want McDonald's to stop interfering with my family."

Parham's lawyers, who filed the lawsuit in state court in San Francisco on Wednesday, have asked that it be certified as a class action. The lawsuit doesn't seek damages; it asks the court to bar McDonald's from advertising any meals that feature toys to California children.

McDonald's said it is proud of its Happy Meals and intends to vigorously defend its brand, reputation and food.

"We stand on our 30-year track record of providing a fun experience for kids and families at McDonald's," the company said in a statement.

McDonald's, the world's largest burger chain, is facing scrutiny for including toys with meals. San Francisco recently prohibited them in meals with more than 600 calories or more than 35 percent of their calories from fat.

Santa Clara County, home of Silicon Valley, has a similar ban. But city leaders in Superior, Wisconsin, this month decided against regulating toys in fast-food meals.

The consumer group said it is focusing on McDonald's because it is the largest fast-food company and spends more money marketing to children than its peers and could serve as a leader if it makes reforms.

The Center for Science in the Public Interest has a track record of getting the food industry to change its practices. Snack and cereal maker Kellogg Co. agreed to a settlement with the center that set nutrition standards for the foods Kellogg could advertise to children. KFC agreed to phase out oils high in trans fats after the center dropped a lawsuit over KFC's use of partially hydrogenated oils.

Fast-food companies spent over $520 million in 2006 on marketing children's meals, and toys made up almost three-quarters of those expenses, the group said.

In this case, the center claims McDonald's is engaged in a "highly sophisticated scheme to use the bait of toys to exploit children's developmental immaturity and subvert parental authority."

The toys encourage children to eat nutritionally unbalanced Happy Meals, which in turn promotes obesity, according to the center's complaint.

"McDonald's advertising of Happy Meals with toys is deceptive and unfair to children, unfair to parents, and in violation of California law," the complaint states.

It's possible to order Happy Meals with healthier elements, such as apples instead of fries or milk instead of soda. But the centre found McDonald's employees usually include the less-healthy options unless a customer specifically requests the healthier foods.

Shares of McDonald's rose 2 cents to $77.13 in early afternoon trading.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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