SUPPLIERS

POLICY STATEMENT
ANIMAL WELFARE AND HUSBANDRY POLICY STATEMENT
GENERAL FACTS
HISTORY
MAJOR SUPPLIERS

Food
Packaging
Uniforms
Equipment
Golden West Foods
McKey Food Service
Sun Valley Poultry
Supplier Investment
Exports




POLICY STATEMENT
McDonald's will:

Purchase supplies from local producers wherever possible
providing they can meet McDonald's exacting product and hygiene
standards and are competitive.

Monitor suppliers in terms of their environmental, social, animal
welfare and agrochemical policies.

Only buy from suppliers who operate responsibly and humanely
and in accordance with government and EU regulations and
guidelines.

Work with suppliers to help them achieve even more exacting
quality and efficiency standards and to develop better methods of
production.

Develop long-term relations with key suppliers.

Settle suppliers' invoices promptly.

Communicate changes and development opportunities to
suppliers in areas which affect their work with McDonald's.

ANIMAL WELFARE AND HUSBANDRY POLICY STATEMENT
McDonald's will not work with any supplier who does not adhere to
the standards required by UK and EU legislation regarding animal
welfare, transportation and husbandry.

McDonald's insists that all meat used in its products has come from
a clean, safe, hygienic, comfortable environment, and that humane
slaughter methods have been used.

McDonald's will not accept beef originating from cattle subjected to
hormonal growth promoters.

McDonald's only uses EU produced beef from EU approved
abattoirs under the auspices of qualified veterinary surgeons and
health inspectors. All premises used at every stage during the
production of McDonald's products must regularly undergo EU
approved inspections and ensure continued compliance with
quality and hygiene standards.

McDonald's encourages its suppliers to explore continually
advances in animal rearing and husbandry and to encourage their
own suppliers to do the same.

McDonald's supports the Government's measures to increase
animal welfare awareness on farms.

GENERAL FACTS
[]Nowhere in the world does McDonald's use of beef threaten, or
remotely involve, tropical rainforests.


[]Food and beverage is provided for around 1.2 million people per
day in the UK.


[]Expenditure on food and non-food items in the UK in 1994 was
£245 million.


[]The 1994 expenditure on food in the UK was £220 million.

[]McDonald's menu concentrates upon five main products: beef,
chicken, bread, potatoes and milk which account for £151 million
(69%) of all food expenditure.


[]In 1994, McDonald's customers in the UK consumed: £45 million
of beef, £28 million of chicken products, 42,000 tonnes of
MacFries, 5.5 million gallons of milk and 335 million buns.


[]In order to be able to supply the necessary quality and quantity
of products, McDonald's suppliers have made substantial
investments on the company's behalf. For instance, six new food
factories have been opened over the last six years at a cost in
excess of £33 million.


HISTORY
McDonald's suppliers are an integral part of the company and its
success. Relationships are built upon a mutual trust, with no
contracts signed with food and packaging suppliers. The suppliers
who commit resources and funds to new technology and product
development are rewarded through the financial gain associated
with fast moving product lines.

In the UK, 6,000 companies supply and support McDonald's UK
network, following the exacting standards of quality, value and
cleanliness set by the company. The most up-to-date and efficient
food processing techniques are employed within tightly monitored
quality control.

MAJOR SUPPLIERS
FOOD
McKey Food Service Hamburger patties, bacon and pork products
Golden West Foods Buns, ketchup, milk shake syrups, multi-temperature distribution
Sun Valley Poultry Chicken products
McCainFrench Fries and Hash Browns
Icelandic Freezing Plants Fishproducts
Unigate Dairies Milkproducts
Ashby Dairies Milkproducts
Scottish Pride Dairies Milkproducts
Central Edible OilsVegetable shortening
Howard Long International Salad
Kitchen Range FoodsFruit Pies and Donuts
Gala CoffeeCoffee
Dairy Produce PackersCheeseslices
McCormickSauces
Coca-ColaSoft drinks

PACKAGING
Banders Napkins and cold drink cups
Lin Pac Foam Packaging
Smith AndersonPaperbags
Polarcup Cold drink cups, lids and straws
Fibracan Hot drink cups

UNIFORMS
Career Apparel Crew uniforms

EQUIPMENT
HKI Kitchen equipment

GOLDEN WEST FOODS LTD
Golden West Foods was established in Watford in 1977 and
relocated in 1982 to a purpose built facility in Hemel Hempstead,
serving approximately 255 restaurants. In 1991, a now bakery and
distribution centre opened in Heywood, Lancashire to service the
North of England.

The milk shake syrup and ketchup manufacturing facility is in
Corby and exports to 16 European countries.

As well as producing all the buns, tomato ketchup, milk shake
syrups and sundae toppings for McDonald's UK, Golden West
Foods provides a complete multi-temperature distribution service
to McDonald's UK for all its food, packaging and other ancillary
products from its two purpose built depots at Hemel Hempstead
and Heywood, Lancashire.

Whilst the distribution service is dedicated to McDonald's, its food
production facilities also supply a growing number of other
customers.

The company operates 24 hours a day, 364 days a year.

Multi-temperature vehicles deliver to the restaurants at least three
times per week. The trailers are designed to carry frozen, chilled
and non-chilled goods.

Golden West constructed a purpose built bakery and 75,000sq ft
distribution centre at Heywood during 1991 at a cost of £15 million.
In 1990 a new 40,000sq ft factory was constructed in Corby for
liquid products, representing an investment of £5 million. In 1994,
the company invested a further £2 million in improving equipment,

McDonald's has established its own Quality Inspection Programme.
Use-by dates and temperature tests for chilled and frozen goods
are stringently controlled.

McKEY FOOD SERVICE
McKey Food Service was established in 1978 to exclusively supply
McDonald's with hamburger patties. In 1980 the main facility in
Milton Keynes was built, followed in 1989 by a further investment in
a new facility in Scunthorpe. This 62,000sq ft facility represented a
total investment of £6.3 million.

[]The hamburger patties are made from 100% pure beef with no
additives, fillers, binders or flavour enhancers.


[]The majority of the beef is purchased from UK and Irish
suppliers, with a minority sourced from other EU countries.


[]EU approved inspections are carried out by qualified vets at the
abattoirs and deboning plants to guarantee quality and hygiene.
The suppliers then undertake a further 40 quality control tests on
every single batch. If one check is failed, the whole consignment
will be rejected.


SUN VALLEY POULTRY
Sun Valley has supplied McDonald's with all chicken products
since 1984 from a factory in Hereford. This facility was destroyed
by fire in 1993 and has been replaced by a new purpose built
factory in Orleans, France which is supplied with chicken meat
from Sun Valley in the UK. A replacement UK factory is due to open
in 1995. A wholly owned subsidiary of Cargill PLC, the company
also supplies chicken products to McDonald's in France, Holland,
Ireland, Belgium, Spain, Morocco and Denmark.

[]Chickens used for McDonald's products are reared in conditions
where they have the freedom to move around.


[]The chickens are reared on deep litter, in environmentally
controlled houses which minimise distress to the birds.
Temperature and ventilation is constantly monitored, as is the
supply of food and drink.


[]Maltreatment of birds results in the immediate termination of the
contract with the farmer.


SUPPLIER INVESTMENT
[]Kitchen Range Foods completed a purpose built 30,000sq ft
factory at Peterborough in 1991 at a cost of £3 million.


[]McCormick invested £2 million in a new facility completed during
1993 to produce McDonald's sauces and salad dressings.


[]Howard Long International invested £3.5 million in a project to
completely refurbish their production facilities in Methwold,
Suffolk. The project was completed in 1992 and is now one of
the most modern units of its type in Europe.


EXPORTS
During 1994, McDonald's UK food and packaging suppliers
exported raw materials and finished products to the McDonald's
system in the following countries:

AustriaGuadeloupeNorway
BelgiumHollandPoland
CzechRepublicHungaryRussia
DenmarkIcelandSaudiArabia
EgyptIsraelSpain
EireJapanSweden
FinlandMartiniqueSwitzerland
Germany.MoroccoTurkey

Amongst the £70 million of food products and £13 million of packaging
exported were £13 million hamburger patties, 3,000 tonnes of cheese
slices, 45 million fruit pies and donuts and 167 million buns.

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