How McDonald’s ended up in a ‘fake cheese’ mess

The normalcy at the restaurant belied the crisis-fuelled tension palpable in the offices of Westlife Foodworld, less than a kilometre away. Westlife, through its subsidiary Hardcastle Restaurants Pvt. Ltd, operates more than 350 McDonald’s restaurants in 11 Indian states across west and south India. The company is incidentally also the upstairs neighbour of Mint’s Mumbai bureau.

A brief look at social media reveals the source of tension.

“If cheeseburgers, cheese nuggets, or cheesecakes are your go-to orders from #McDonalds, then there is news for you: the cheese is fake!” one prominent media house wrote on X, formerly Twitter, on 24 February.

“#Maharashtra FDA cracks down on #McDonalds, catches fast food major using cheap vegetable oil in place of #cheese,” posted another.

Several X users joined the outrage against the fast-food giant.

Media reports stated that the Maharashtra Food and Drug Administration (FDA), the agency responsible for enforcing laws related to food, drug, and cosmetics in the state, found that a McDonald’s outlet used cheese analogues in some products that were marketed as containing real cheese.

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Cheese analogues are substitutes for cheese that mimic the flavour and texture of cheese but are usually made from cheaper sources of fat like vegetable oil instead of milk fats.

Westlife has steadfastly denied this allegation. But despite the company’s clarifications, the situation quickly snowballed into a public relations disaster. News reports claimed that as a fallout of the McDonald’s fiasco, Maharashtra authorities will inspect other global food chains on their ingredient claims.

Other big brands joined in on the conversation. India’s largest dairy brand, Amul, recently launched its own campaign claiming the authenticity of its cheese products. In a social media advertisement by Amul, a mother reprimands companies for cheating her with false claims, urging them to either change their product or change their label. The sentence “Real cheese is made of pure milk, not vegetable oil” was shown at the end of the advertisement, further fanning the flames of doubt over the genuineness of McDonald’s cheese.

News reports claimed that as a fallout of the McDonald’s fiasco, Maharashtra authorities will inspect other global food chains.

Several non-government organizations penned social media posts and awareness campaigns against the ills of mis-labelled fast food.

“We believe we are in the right and we will do whatever is in our power to convince our consumers that our cheese is real cheese,” said Saurabh Kalra, the managing director of Westlife Foodworld.

He mentions the fake-cheese episode in the same breath as other major challenges that McDonald’s India faced over the years—the global financial crisis of 2008; the intense competition in 2013-14 after many burger brands started India operations; the covid-19 crisis.

The backstory

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While the controversy erupted and became public in February, the issue dates back to early October last year. The FDA had inspected McDonald’s only outlet in Ahmednagar, a city 260km east of Mumbai, reportedly after receiving consumer complaints regarding the ingredients used by the restaurant.

During the inspection, it found that eight items on the menu, which had cheese in their name, allegedly did not contain real cheese. These include McCheese veg burger, McCheese non-veg burger, Grilled chicken and cheese burger, Cheesy nuggets and even Blueberry cheesecake.

The inspector objected to the use of the word cheese in the names of these products, as this could be misleading for consumers. An official notice from the FDA to the restaurant followed, asking for a change of name.

Westlife filed an appeal with the Maharashtra FDA Commissioner’s Office. However, it changed the names of the products under question across Maharashtra. McCheese veg burger, for instance, changed to Cheddar delight veg burger; Grilled chicken and cheese burger was now called American non-veg burger.

Westlife claims that the issue was resolved in January and in February, it even started bringing the word cheese back, across its locations in the state.

Kalra said that the names were changed temporarily and under protest to prevent restaurant closure by the FDA.

What followed was a long spate of back-and-forth communication between Westlife and Maharashtra FDA. The company claims to have furnished laboratory certificates showing that its products indeed contained real cheese as per the standards laid out by the Food Safety and Standards Authority of India (FSSAI). In India, FSSAI formulates the rules around food safety which are then enforced by state FDA bodies.

Westlife claims that the issue was resolved in January and in February, it even started bringing the word cheese back, across its locations in the state.

However, the sudden “media blowout” in late February took the company by surprise, Kalra said.

Stock bites

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On 23 February, Maharashtra FDA minister Dharamraobaba Aatram and Maharashtra FDA commissioner Abhimanyu Kale appeared on television news channels, giving damning statements against McDonald’s.

“Our officers inspected the outlet and issued an order that they should change their descriptions,” Maharashtra FDA commissioner Kale said in a televised interview that day. “It was found that they were using cheese analogue. In that cheese nugget, they were using around 55-60% of cheese and everything else was vegetable oil,” he had said.

Suddenly, McDonald’s alleged use of fake cheese was one of the top trending news stories in the country, sending Westlife into a crisis management mode.

Westlife Foodworld stock lost almost 3% on the BSE that day, a Friday, to close at ₹793.05. By the next Friday, the stock had crashed more than 11%. It closed at ₹769.90 on 6 March.

‘No lab tests’

To get to the bottom of the ‘cheesegate’, Mint visited Maharashtra FDA commissioner’s office at Bandra-Kurla Complex (BKC), the city’s prime business district, on 5 March. The airy building had an air of calmness that belied the hustle and traffic jams that are innate to BKC. Commissioner Kale occupies a spacious corner office on the second floor, one that would make every top executive in space-starved Mumbai envious.

Kale keeps a moustache. The dark hair on his square shaped face is well combed. That day, he sat wearing a checked jacket. He reiterated to this writer that analogue cheese was found in the food during inspection at the Ahmednagar McDonald’s outlet but said little else. He didn’t have time for a more detailed conversation.

Another official at the FDA, who asked not to be named, said that the Ahmednagar inspector issued notices to Westlife after going through the supplier-provided ingredient list on the packaging of raw materials like patties, nuggets and cheesecakes.

“The ingredient list clearly mentioned palm oil and other products apart from cheese when the name said cheese patty,” this official said.

There was no laboratory testing involved when arriving at the conclusion that the products contained cheese analogues, he added. The FDA commissioner did not respond to Mint’s follow-up queries messaged to him on Tuesday.

What the law says

Legal experts say that there is no law in place on the minimum cheese content a product must have to carry the word cheese in its name.

So, if McDonald’s has a small portion of real cheese in a burger, it can legally call the product a cheese burger, regardless of the other contents mentioned in the ingredient list.

“A burger patty will obviously have multiple ingredients. The question to be determined is if the cheese content is real cheese or not. If it is indeed cheese, then McDonald’s claim is right legally,” said Rohit Jain, managing partner, Singhania and Co. LLP, a law firm.

“The FSSAI guidelines very clearly define what cheese is. But there are no standards on the minimum requirement of cheese in a product, say burger patty, for it to be called a cheese patty,” he added.

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Another legal question: when a restaurant puts cheese analogues in its food along with real cheese, does it need to declare it?

Sweta Rajan, partner at law firm ELP said that there are FSSAI guidelines that mandate a clear declaration when cheese analogues are used in a product. However, there is a caveat.

“Let’s assume that what the FDA is claiming is correct—that cheese analogue was used. There is a requirement in FSSAI law that if you use an analogue, you need to declare it. But that requirement has been issued in the context of packaged food,” she said. “For cooked food products served in a restaurant to be treated like packaged food doesn’t sit right with how the law was envisioned, although there is a general requirement for food declarations and claims to be truthful and not misleading,” she added.

For cooked food products to be treated like packaged food doesn’t sit right with how the law was envisioned.
—Sweta Rajan

In summary, Westlife and McDonald’s are in the clear legally as long as there is some real cheese content in their products. And they don’t have to declare if they use cheese analogues along with the real cheese.

The vindication

Vindication came for Westlife on 6 March. The company held a press conference to declare that it has received a confirmation from FSSAI that it exclusively uses real cheese and no analogues in its products.

There was a marked shift in Kalra’s voice from a week ago, as he declared that the company will be reinstating the term cheese in the names of its products. “I will be very, very categorical about it—the cheese we use is 100% real cheese,” he reiterated at the press meet.

“When you are creating a cheese patty, you are not creating a cheese block,” he explained. “There are other ingredients that go into the patty. Cheese is just one of the ingredients. But I think we have maintained from day one that we do not use analogue cheese whatsoever. We use 100% milk-based cheese.”

When you are creating a cheese patty, you are not creating a cheese block.
—Saurabh Kalra

A press statement from Westlife cited a part of the FSSAI note as: “Articles in question contain cheese or cheese product as a part of composition and does not contain analogue in dairy context in any form.”

The company did not share a copy of the FSSAI note.

It is not clear yet if the Maharashtra FDA commissioner would reopen the case against McDonald’s after it reinstates the term cheese in its product names.

Tight spot

While Westlife is clear in the eye of the law, the biggest casualty from the episode could be the McDonald’s brand.

“It is a brand tarnishing allegation for sure,” Kalra agreed.

Brand experts say that for iconic chains like McDonald’s—founded in the 1940s, it has restaurants in over 100 countries—consumer trust is paramount.

“It doesn’t matter who is to blame here. A brand is built on trust and stories like this can undermine the McDonald’s brand,” said Zia Patel, brand strategy director at Ochre Brand, a consultancy.

The fiasco is similar to the fake honey controversy from three years ago. The Centre for Science and Environment, a non-profit think tank, discovered that 17 out of the 22 honey samples it examined from popular Indian brands had failed purity tests. This made many consumers permanently circumspect about buying honey from top brands. If the current crisis isn’t handled right, a similar fallout can await McDonald’s in India.

Food involves a lot of trust, and they need to repair this trust.
—Zia Patel

Kalra says it’s too early to comment on the impact on demand due to the episode, but he admitted that a lot of customers have started questioning the brand. When Mint visited the McDonald’s outlet on Friday, most patrons seemed unaware of the controversy. But perhaps there is some survivorship bias at play here. The customers that continue visiting McDonald’s are likely to be the ones unaware of the controversy and there is a possibility that those who are aware have stopped visiting.

“They are in a tight spot. Food involves a lot of trust, and they need to repair this trust,” Patel said. While Westlife has made several public statements defending its position, Patel feels that the communication must come from McDonald’s headquarters.

“They need to be on the front foot and make a public statement. People buy the brand McDonald’s; they don’t care or know about the franchisee owner Westlife,” she said. McDonald’s US did not respond to a clarification sought by Mint.

The company, however, is no stranger to controversies. In the 90s, McDonald’s was criticized for adding beef flavouring to its fries without informing American customers; in 2014, it was accused of using expired meat in China. With its presence in nearly every part of the globe, the brand has even found itself caught in geo-political wrangles. Just last October, when the FDA was inspecting the Ahmednagar outlet, McDonald’s in the Middle East found itself in a spot over Israel’s war on Hamas. While the Israeli McDonald’s offered free meals to the country’s troops, McDonald’s franchises in other countries in the region—Saudi Arabia, Oman, Kuwait, the United Arab Emirates, Jordan, Egypt, Bahrain and Turkey—pledged support to the Palestinian cause, Al Jazeera had reported.

But then, McDonald’s knows how to weather any storm.