Happy Meal Toy Ban Hits McDonald's

Local politicians across the country are trying to make us healthier by banning or reducing bad ingredients in our foods. Trans fat is banned in New York City and California. New York is mulling mandatory salt reductions. The moves threaten sales and increase costs for businesses from small operators to large chains like McDonald's Corp. to food companies big and small.

Now Santa Clara County in California is aiming at one of the Golden Arches' best marketing campaigns, the Happy Meal. Santa Clara supervisors just voted to ban any toy handouts if they're part of high-calorie meals (like burgers and fries).

The law "prevents restaurants from preying on children's' love of toys," Supervisor Ken Yeager tells the Los Angeles Times. "This ordinance breaks the link between unhealthy food and prizes."

For McDonald's, Santa Clara is one market. The chain has been remarkably resilient to attacks from the 2004 movie Super Size Me to a flap over McDonald's sponsoring elementary school report card prizes in Florida (the practice was ended two years ago). Sales continue to climb, though the U.S. is the slowest-growing market for McDonald's (U.S. revenue was up 1.5 percent in the first quarter while total sales rose 4.2 percent excluding benefits from currency exchange). Net income climbed 11 percent to $1.1 billion.

McDonald's doesn't quantify sales of Happy Meals but company officials have acknowledged the importance of the kids' meals, a campaign that's lasted three decades. Ronald McDonald even pitches healthy food. In recent years, the company started offering healthier items as options for the childrens' meals, including apples and milk. The problem is kids don't want apples and milk. They want fries and Coke.

A widespread ban on Happy Meals would have a big effect on McDonald's. But will it make our kids healthier?