Pizza Hut 2008 Annual Report Download - page 52

23MAR200920294881
MANAGEMENT STATEMENT IN OPPOSITION
TO SHAREHOLDER PROPOSAL
What is the recommendation of the Board of Directors?
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
What is the Company’s position regarding this proposal?
YUM, as a major purchaser of food products, has the opportunity and responsibility to influence the
way animals supplied to us are treated. We take that responsibility very seriously, and we are monitoring
our suppliers on an ongoing basis to determine whether our suppliers are using humane procedures for
caring for and handling animals they supply to us. As a consequence, it is our goal to deal only with
suppliers who promise to maintain our standards and share our commitment to animal welfare.
We have a track record of leadership in animal welfare. For example, we have developed the YUM!
Brands Animal Welfare Guiding Principles and have expanded the KFC Animal Welfare Advisory Council
to provide leadership in the animal welfare area and in our commitment to animal welfare.
To help ensure that our suppliers meet our animal welfare objectives, we adopted the YUM! Brands
Animal Welfare Guiding Principles and the KFC Poultry Welfare Guidelines (collectively the ‘‘Guiding
Principles’’). The Guiding Principles express our goal to deal with suppliers that are committed to the
raising, transportation and slaughter of poultry in a manner that is free of cruelty, abuse and neglect.
The Guiding Principles are applicable to all YUM poultry suppliers across the United States (these
are the same suppliers that supply poultry to our competitors). We are also looking into how these
principles can be applied internationally.
As stated in the Guiding Principles, the Company, together with the KFC Animal Welfare Advisory
Council, works with its suppliers to develop systems to monitor and assess the effectiveness of suppliers’
poultry handling practices. The KFC Animal Welfare Advisory Council consists of experts in poultry
physiology, poultry genetics, animal behavior and veterinarians. In 2008, the KFC Animal Welfare
Advisory Council met to review and discuss the current status of Controlled Atmosphere Stunning
technology, concluding that, while the method does offer some promise, it results in no net improvement in
Proxy Statement
animal welfare. The KFC Animal Welfare Advisory Council has also considered the development of an
alternative stun technology and contributed to defining the necessary steps to fully vet that technology’s
benefits and feasibility. The KFC Animal Welfare Advisory Committee requested a series of nine scientific
reviews of broiler welfare audit points and policy by the experts of the American Association of Avian
Pathologists to provide additional guidance. The results of those reviews have been incorporated to
enhance and update our audit process. The Company also continues to work with the Professional Animal
Auditor Certification Organization, Inc. (‘‘PAACO’’) to improve certification training and guidelines and
includes a Foundation PAACO certified auditor on staff. It should also be noted that we operate in over
100 countries and territories, and we comply with all national, state and local laws and regulations
regarding the handling of poultry in those countries.
Why does the Company oppose the proposal?
Our commitment, leadership and results are well established and recognized within the industry. We
work hard to be a good corporate citizen and are strong advocates of good animal handling practices. Our
policies are designed to help to achieve humane treatment of animals. We have been, and will continue to
be, committed to upholding and abiding by the principles we have set. We monitor our suppliers for
compliance and have expanded our monitoring efforts through plant and farm level audits. More
information regarding our animal welfare program can be found on our Web site at www.yum.com/
responsibility/animalwelfare.asp or www.kfc.com/about/animalwelfare.asp. We believe that the proposed
animal welfare report and review is unnecessary and would not result in any additional benefit to our
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