Fast-food lobbies U.S. states on "Happy Meal" laws

Two McDonald's Happy Meal with toy watches fashioned after the characters Donkey and Puss in Boots from the movie ''Shrek Forever After'' are pictured in Los Angeles June 22, 2010.

SAN FRANCISCO (Reuters) - Fast-food companies are asking U.S. state legislators to remove restaurant marketing from local governments' regulatory menu, in the latest industry bid to stay a step ahead of anti-obesity laws.

The lobbying push, which has succeeded in Arizona and gained traction in Florida, aims to stop marketing restrictions before they start. The efforts come as food companies face increasing scrutiny from the U.S. government over how they pitch their products to youngsters as obesity rates rise.

Last year San Francisco became the first major city to require that McDonald's Happy Meals and other restaurants' meals for children meet certain nutritional standards before they can be sold with toys.

The $184 billion fast-food industry fiercely opposes the so-called "Happy Meal" ordinances.

Michele Simon, a public health attorney and research and policy director for the Marin Institute in Northern California, says the industry is trying to tie the hands of local officials.

"It is taking away the right of local government to act," said Simon, author of "Appetite for Profit", a book that attacks the practices of the U.S. food and restaurant industry.

Industry lobbyists acknowledge the importance of marketing for restaurant profits, but they cast the latest debate in broader policy terms.

"It's not that we're trying to make kids fat -- clearly we're not; it's about how much government intrusion is really necessary," said Steve Chucri, president of the Arizona Restaurant Association.

Chucri says he told colleagues last year that they would be fools if they thought San Francisco's law would not be replicated. Under a state law that will take effect July 20, Arizona counties and cities will not be allowed to regulate toys, games, coupons, crayons, coloring placements or prizes that appeal to children if they are offered at restaurants.

The regulation of "consumer incentive items" at restaurants are "of statewide concern," says the law, which passed with overwhelming support. Gov. Jan Brewer signed it last month.

Since the bill passed, restaurant chains and lobbyists from across the country have asked for copies, Chucri said. A similar measure passed two Florida state Senate committees this year, but has not received a vote in the full chamber.

Anti-obesity activists and public health experts liken the latest industry push to so-called Cheeseburger bills, which choke off lawsuits brought by overweight consumers. Twenty-three states have passed such measures, according to the National Restaurant Association.

HEALTH CRISIS

The "Happy Meal" scrutiny comes as the U.S. government has pressured food companies to cut back on aggressive advertising of junk food to kids, saying it contributes to a serious health crisis facing young Americans.

Obesity among children and adolescents has almost tripled in the United States since 1980. About 17 percent of children and adolescents aged 2 to 19 are obese, putting them at higher risk for diabetes, cardiovascular disease and other serious illnesses, according to the Centers for Disease Control and Prevention.

In 2006, the latest year for which data is available, fast-food companies led by McDonald's spent more than $520 million on advertising and toys to promote meals for children, according to a U.S. Federal Trade Commission report.

When the efforts of other food and beverage companies are included, promotional spending aimed at children topped $1.6 billion.

The Happy Meal, which debuted in the United States in 1979 and features items from popular films like "Shrek" or toys such as Transformers or Lego, has been a huge hit for McDonald's. It has made the company one of the world's largest toy distributors, spawning similar offerings at other fast-food chains.

Happy Meal sales account for less than 10 percent of the company's total U.S. revenue, McDonald's has said previously. U.S. sales hit $8.1 billion in 2010. On Friday, a spokeswoman declined to comment on Happy Meal sales.

One industry argument against local regulation is the cost that myriad marketing standards impose. But Kelly Brownell, the director at Yale University's Rudd Center for Food Policy and Obesity, sees a larger concern.

"The companies are fearful these laws will impede their opportunity to recruit new customers," he said.

(Reporting by Dan Levine and Lisa Baertlein; Editing by Richard Chang)