IBS

Hamish

THE grief cycle describes a common pattern of emotional responses to death, starting with denial, changing to anger and then depression, and ending with acceptance. Pet-owners in North America are adding another stage to the process—litigation. In mid-March Menu Foods, a Canadian contract manufacturer, pulled 95 brands of dog and cat food from shelves in America, Canada and Mexico. The recall came after reports from consumers of contaminated food were confirmed by the company’s own “taste” tests, in which nine cats died. Further tests by American government officials identified aminopterin, a type of rat poison, in the food.

Menu Foods has confirmed 16 animal deaths so far but that number will rise. Michael Dillon, a pet industry consultant, conservatively estimates a final death toll in the thousands. Local newspapers issue sombre reports on victims such as TJ, a Yorkshire terrier in Missouri who enjoyed the smell of roses. Enter the lawyers. Distressed owners have filed class-action lawsuits against Menu Foods, as well as against a retailer who stocked the items and a manufacturer who used the Canadian firm to make its products. 

The depth of response may baffle the petless but comes as no surprise to industry insiders, who identify “humanisation” as a principal feature of the sector. Many owners think of their pets as children—childless consumers accounted for 60% of pet-related expenditure in America in 2005—and treat them more like people than animals. Trends in human food are quickly replicated in pet products, says Bob Vetere, president of the American Pet Products Manufacturers Association.

The recalled pet foods were “cuts and gravy”, which are designed to mimic the food people eat (wheat gluten, the probable source of the contamination, is used to thicken the gravy). Health foods are fast spreading from dinner tables to doggie bowls: Wal-Mart and Target, America’s two biggest retailers, both introduced natural pet-food lines last year. The recall is likely to reinforce this trend.

Doting owners don’t only spend big money on food. Overall, pet-related sales are forecast to hit $40.8 billion in America this year, 6% more than in 2006. Absurdities such as diamond-studded Cartier dog collars and Goyard travelling bowls are out of the reach of most owners but the better-off are happy to splash out on branded carriers and clothing. Pet services are booming too. Speciality retailers already boost sales by offering grooming and boarding. Mr Dillon expects to see “human” retailers such as Wal-Mart branching into pet services over the next couple of years.

The pet-food recall highlights two risks faced by firms using contract manufacturers. One is reputational. Many pet owners have expressed surprise that premium brands were being made with common ingredients and at the same facility as a host of cheaper, own-label brands. Why pay more for branded goods, they ask? The criticism may be unfair—differences between products lie largely in the varying proportions of ingredients used—but the perception of reduced value will be hard to shift.

The second risk relates to extended supply chains. The pet-food industry is more lightly policed than the human-food one and testing procedures were in the hands of Menu Foods. Aminopterin is banned in America but the wheat gluten at the centre of the contamination investigation was imported from China, where the poison is used. There are mutterings about how quickly Menu Foods reacted to reports of pet deaths. Things can go wrong at companies’ own facilities too but Mr Vetere predicts that the recall will prompt tougher provisions in agreements with contract manufacturers.

Just as owners come to resemble their dogs so too the human and pet markets are converging. Picky customers and growth in premium products are already familiar features of many consumer landscapes. But pet owners turning to the courts for redress over the loss of a loved one will notice that people and animals are still different in law. Pets are treated as property not as people, severely crimping the opportunity for bumper payouts to the bereft that Americans have become used to.

OTAH, Central African Republic, March 30 — Every year, Robert Dourmadji would set aside some of his grain for seed, resisting the temptation to feed his wife and seven children with it even when times got lean as the planting season approached.

This year, though, he had no choice — his wife made porridge from the last of the millet weeks ago. They had been surviving on green mangoes and manioc leaves. Pushed from their homes in a nearby village more than three months ago by a rebellion and the scorched-earth counterinsurgency tactics of their country’s army, they have been living in desperate conditions.

“What can we do?” he said. “When the rains come we will really suffer.”

Mr. Dourmadji and hundreds of other ragged, hungry people came out of hiding Friday morning to meet John Holmes, the United Nations’ new under secretary general for humanitarian affairs, who visited the Central African Republic on the last leg of a 10-day visit to the region.

Mr. Holmes pledged more aid to help those left homeless by the fighting, now more than 210,000, and urged aid groups and donors to do more to help this nation, one of the world’s poorest and most unstable.

“They need urgent help before the harvest to make sure they have a harvest,” he said. “We aren’t doing enough. There is a bigger problem than most were aware of.”

The crisis in the Central African Republic is now more than two years old, and the fighting has killed thousands of people and caused hundreds of thousands of the country’s four million people to flee their homes.

Their flight has been so desperate that those who can have run across the border into their troubled neighbors’ territory. About 50,000 people from the northwest have fled into southern Chad, and thousands of residents of the northeastern town of Birao, in a perverse twist, have even fled into the Darfur region of Sudan, where a struggle over power, land and identity has raged since 2003.

But unlike the suffering of its neighbors, the crisis in the Central African Republic has largely escaped the world’s notice. International donors pay about $1 billion to support the effort to feed and shelter two million displaced people in Darfur. Here that figure is about $50 million, United Nations officials say.

That has meant little assistance for people left utterly destitute. Jean-Charles Dei, the top official of the World Food Program in the Central African Republic, said on a visit to Otah on Friday that his organization had no food available to feed the 1,700 people hiding here. Its operations here are chronically short of cash.

“Unfortunately, we have not had the capacity we would have liked to respond,” Mr. Dei said.

Mr. Holmes has spent the last 10 days visiting this region, which has spawned one of the world’s deadliest and most complex crises. Over the past three years, it has come to encompass three deeply troubled and unstable nations in a set of loosely connected conflicts.

In all, 2.5 million people have been forced from their homes in the three countries. In Darfur at least 200,000 people have died, and perhaps the toll is more that twice that number, though it is impossible to be sure without detailed mortality surveys. No one is sure how many have died in Chad, where the violence is linked to Darfur, or in the Central African Republic, which is a close ally of Chad’s embattled government and where diplomats and experts say rebels backed by Sudan have operated.

For more than two years a low-level, homegrown insurgency has raged in the northwestern part of this impoverished and unstable nation, and in the last year a new rebellion in the northeast has added new misery. That rebellion is suspected of having ties not only to Sudan’s government but also to rebels seeking to overthrow Chad’s government.

Mr. Holmes, who was appointed on March 1, has been seeking to highlight the enormous needs in this regional morass. He said he chose to begin his term as the United Nations’ top aid official in this region because it presented some of the biggest and most complex challenges.

“It is the biggest humanitarian operation in the world,” he said of Darfur.

Toby Lanzer, the United Nations humanitarian chief in the Central African Republic, said that despite the nation’s desperate poverty, saving lives here, with enough resources, would be relatively easy.

Chad and Sudan are vast, arid nations that have complex ethnic problems, and aid workers have been attacked and stymied by government bureaucracy. Sudan and Chad have both refused United Nations peacekeeping troops, but the Central African Republic has said it would cooperate with an international force.

“This is a place where the international community is welcomed,” Mr. Lanzer said. “It is a country of four million people. We should be able to fix this.”

Mar 29th 2007 | HONG KONG
From The Economist print edition

Are foreign firms as keen on Asia as they claim to be?

THE announcements come in bold headlines. On March 26th Intel trumpeted plans to build a $2.5 billion chip plant in China. This follows deals in various other industries, including pharmaceuticals and aviation. With $6 billion of foreign direct investment pouring into China alone each month, and other Asian countries growing at a feverish pace, it seems that foreign firms are racing to build up their operations.

But are the headlines and the big numbers misleading? The Boston Consulting Group (BCG) analysed several large western firms and found that, although an estimated 34% of the potential market for their goods is in Asia, the region accounted for only 14% of sales, 7% of employees, 5% of assets, 3% of research and development and 2% of their top 200 people. And these disparities are growing larger, not smaller. “When most corporate groups see this analysis, they say ‘That's our company, too’,” notes David Michael of BCG.

Several explanations spring to mind for the discrepancy between perceived opportunities and actual behaviour. Going into new markets is risky; Asia's boom is still young, so big firms lack the hard data they need to commit; and of course there are currency and foreign-ownership restrictions to worry about (China, South Korea, Thailand, the Philippines, Indonesia, India), the threat of expropriation (South Korea, Thailand), subtle legal changes aimed at foreign firms (Japan) and corruption (everywhere).

Staffing is also a problem. For top executives, moving to Asia requires a leap of faith. A senior manager at one global firm says that, with rare exceptions, Asia is a “career killer”—at the end of a successful tenure there is nowhere to return to at head office. Putting locals in charge can result in embattled regional offices without strong links to headquarters, and headquarters without strong local knowledge.

Some bosses think that a lot of travel in Asia signals their commitment to the region, says BCG. Aircraft to China and India are packed with executives trying to inhale whatever it is that produces rapid growth. The trouble with this approach is that in regions where efficient execution is paramount far too much time is spent ensuring that visitors from head office have a successful trip. And as local managers go overboard to display their success, they weaken the case for more resources.

One example has become a well-understood signalling device for who is visiting China: the rental of a huge billboard on the road between Beijing airport and the city to advertise a firm's products. The idea is that a visiting boss will see it on the drive into town and remark on the company's prominence in China. The sign is changed a few days later as the next boss, from another firm, touches down.

Mar 29th 2007 | FRANKFURT
From The Economist print edition

A forthright boss decides that small is not always beautiful after all

WENDELIN WIEDEKING, the punchy boss of Porsche, the world's most profitable small carmaker, has often described his firm as a David amid the industry's Goliaths. In 2002 he published “The David Principle”, a book of essays on that theme by some of the great and the good. Time and again, he believes, he has shown that the giants “can't simply flatten all around them and think they will survive”.

EPANo question who's on top

So why has Mr Wiedeking now made a takeover bid, albeit not a serious one, for Volkswagen (VW)—the biggest carmaker in Europe? The official answer is the one he has given since he started buying VW shares in September 2005: to secure his co-operation agreements with VW. Those involve, for example, the chassis design, or platform, on which the Porsche Cayenne sport-utility vehicle, the VW Touareg and the Audi Q7 are based; and the new platform which will underpin the Panamera, a forthcoming Porsche sports car.

An unsettling raid on VW shares, or a threatened break-up by a hedge fund or private-equity buyer, could spell an end to those agreements, argue people at Porsche. In the face of that threat, spending around €5 billion ($6.7 billion) to buy 30.9% of VW and secure the agreements is a good deal, they say. Porsche's 30.9%, combined with the 20.3% held by the government of Lower Saxony, provides majority control against all comers—provided the firm and the government continue to see eye to eye.

That may not be so for ever. Christian Wulff, the premier of Lower Saxony, said on March 27th that he would not rule out raising the Land's stake to 25%. He does not want to appear as powerless on VW's supervisory board against Porsche's influence—embodied in the chairman, Ferdinand Piëch—as he did last year when Mr Piëch high-handedly replaced VW's chief executive with another of his choice.

Mr Wiedeking and Holger Härter, his finance director, would not have taken their VW stake to over 30% this week (triggering a mandatory takeover bid) if they had not been sure of two things—besides the approval of Mr Piëch, whose family owns and controls Porsche. The first is that the market price of VW shares was well above the mandatory offer price of €100.92. The second is that sooner or later the government will abolish the 1960 Volkswagen Law, which limits the voting rights of any shareholder to 20% and gives the federal and regional governments seats on the supervisory board. In February the advocate-general of the European Commission gave a damning opinion of the law, on the grounds that it deters foreign investors. The case is expected to be decided by the European Court in the next few months.

Porsche's move superficially resembles those by hedge funds and other activist investors recently to influence strategy at German firms including Deutsche Börse, IWKA, CeWe Color and Techem. But Porsche's motives are very different: it has increased its stake to prevent a change in strategy at VW, rather than encourage one. Mr Wiedeking appears to have no ambitions to restructure VW or to run it himself.

Even so, the David moniker no longer quite fits. For years Mr Wiedeking has scoffed at the notion of quarterly financial reporting, even though that has excluded Porsche shares from any stock indexes, such as the DAX and MDAX, run by Deutsche Börse—probably increasing the cost of capital. This week Porsche challenged Deutsche Börse in the administrative court in Cassel for requiring quarterly reporting as a condition of entry and lost, but will almost certainly appeal. His desire for a listing suggests that Mr Wiedeking now wants to join the Goliaths.

Mr Wiedeking is one of those rare beasts in the corporate jungle who have not yet had their come-uppance. He is widely revered for his forthrightness and his leadership of Porsche, from the dark days of near-bankruptcy in 1993 when he took over, to years of growth and glowing results today. So it would be a pity if this David overreached himself and fell victim instead to another phenomenon, known as the Peter principle: promotion beyond one's level of competence.

The drama for control of the Tribune Company intensified last night as two Los Angeles billionaires put in a last-minute bid, topping an offer from the Chicago real estate magnate, Sam Zell, by a dollar a share.

The two billionaires, Ronald W. Burkle and Eli Broad, sent a letter last night to Tribune management prior to the company’s self-imposed deadline of Saturday, according to a person with knowledge of the proposal.

The two investors said that like Mr. Zell, they would structure a deal based on an employee stock ownership plan, but would offer $34 a share, one dollar more than Mr. Zell’s bid. They also said they would put in $500 million of their own money, compared with Mr. Zell, who had planned to put in at least $300 million.

A Tribune spokesman had no comment last night.

The late bid almost certainly complicates the Tribune’s deliberations as it seeks a way to increase shareholder value. It throws into doubt any previous timetable for a decision about the company.

Both offers are based on a relatively unusual device of employee stock ownership plans, which have been successful for many small companies but have had mixed results for bigger companies.

Such plans, specialists say, have been virtually untested in the last two decades on companies the size of Tribune, which has about 20,000 employees.

The Burkle-Broad proposal would give the two investors 40 percent of the company, transferring 60 percent to the employees, according to someone with knowledge of the proposal. The ownership ratio involved in Mr. Zell’s proposal is sketchy, although his plans would also make the employees the majority owners.

Tribune, whose assets include The Los Angeles Times, The Chicago Tribune, 23 television stations and the Chicago Cubs, was forced to put itself on the block almost six months ago at the behest of its biggest shareholders, the Chandler family, who were unhappy with the management and the sagging share price.

Mr. Zell’s proposal would buy out the Chandlers; it is not clear how the Burkle-Broad plan would deal with the family, but in offering more money, the Burkle-Broad plan could probably accomplish the same thing.

Mr. Zell has said that he would keep the company intact, although his long-term plans have not been made public.

Mr. Broad, a real estate developer and civic leader, and Mr. Burkle, a grocery magnate who now runs Yucaipa, an investment firm for private and public retirement funds, had initially and separately expressed interest in acquiring only The Los Angeles Times, and their long-term objectives for the whole company are not known.

Tribune said in September that it would explore its strategic alternatives and come up with a plan by the end of the year. But the response to its auction was lackluster and it extended its deadline to the end of the first quarter, which is Saturday.

Mr. Burkle and Mr. Broad put in an earlier bid for what amounted to about $27 a share. But that too was perceived as inadequate.

Mr. Zell came late to the game and the company vacillated on his initial offer, prompting him to increase it. People with knowledge of the situation said the company had most recently been leaning toward his proposal, which would take the company private, but it was concerned that he would be taking on too much debt.

Still on the table is a plan by the company to restructure itself, partly by spinning off its television stations.

One hurdle for any new owner would be to overcome government rules that do not allow owners of newspapers to own broadcast outlets in the same market. Tribune has been doing so under a special waiver.

The idea of using an employee stock ownership plan was not original with Mr. Zell. In fact, Mr. Burkle himself had backed just such an idea last year in an attempt to acquire other newspapers. But, oddly, that option was not part of his and Mr. Broad’s earlier bid for Tribune. Once Mr. Zell put forth the notion of an employee ownership plan, and it seemed to be winning favor with Tribune, Mr. Burkle and Mr. Broad recast their bid to base it on such a plan.

PARIS, March 29 — France’s presidential campaign has been seized by a subject long monopolized by the extreme right: how best to be French.

The conservative candidate, Nicolas Sarkozy, wants to create a ministry of “immigration and national identity” that would require newcomers to embrace the secular values of the republican state.

The Socialist candidate, Ségolène Royal, wants every French citizen to memorize “La Marseillaise” and keep a French flag in the cupboard for public display on Bastille Day.

The far-right candidate, Jean-Marie Le Pen, of the National Front party, chortles that his rivals have stolen — and therefore validated — his message of “France for the French.”

Some political commentators have accused Mr. Sarkozy of harking back to the darkest period in modern French history: the collaborationist Vichy government during the Nazi occupation. Ms. Royal, meanwhile, is being attacked by both her rivals and her own camp for manipulating symbols that historically have been the domain of the far right.

With the first round of the election 24 days away, the battle over French identity has overtaken discussion of more practical issues like reducing unemployment and making France more competitive.

On Tuesday, as if to underscore the tensions over identity, roving bands of young people threw objects at the police, smashed store windows and damaged property for several hours at the Gare du Nord, a major train station in Paris. The trouble started when an illegal immigrant from Congo jumped a turnstile in the subway and tried to punch a transit agent who asked to see his ticket.

The police shut down the subway and commuter train system, arrested 13 suspects and used tear gas before restoring order after midnight.

The shift to debating Frenchness is aimed in part at luring the right-wing vote away from Mr. Le Pen, who shocked France in 2002 when he finished the first round of voting in second place.

It is also an attempt to reassure jittery voters that France will remain an important power at a time when it is losing prominence in a larger European Union and a globalized world and struggling with a disaffected Muslim and ethnic Arab and African population at home.

“Resolving the identity crisis in France is a very serious problem, but both Nicolas Sarkozy and Ségolène Royal have trivialized it in this election,” said Eric Dupin, a political scientist and an author. “Both of them are playing on the fears and the base emotions of the people.”

François Bayrou, the centrist candidate who leads the tiny Union for French Democracy party, denounced the “nationalistic obsession” that had infiltrated the campaign. “Every time in our past that we have wanted to go back to external signs, it has led to periods that are unhappy,” he said.

For the past few years, France has struggled with economic and cultural issues related to its immigrants. One is shared by much of the rest of Europe: how to stop the influx of illegal immigrants who drain a country’s economy and social services. A second is how to force French citizens of immigrant origin to obey laws, including those banning practices like polygamy and the wearing of head scarves by Muslim girls and women in schools and universities.

As interior minister before he stepped down Monday to focus on his campaign, Mr. Sarkozy tightened immigration laws and boasted that he had expelled tens of thousands of illegal immigrants and prevented others from entering. His pledge in 2005 to rid France’s ethnic Arab and Muslim suburbs of “scum” contributed to a three-week orgy of violence there.

Mr. Sarkozy, who has largely avoided the suburbs during his campaign, has criticized immigrants and their offspring who resist the French model of integration, saying it is unacceptable to want to live in France without respecting and loving the country or learning French.

He touched off the current debate in a television appearance on March 8 when he announced a plan to create a “ministry of immigration and national identity” if elected.

Ms. Royal called the plan “disgraceful,” adding, “Foreign workers have never threatened French identity.”

“Indecent,” was the reaction of Azouz Begag, the minister for equal opportunity. “I’m not stupid, and neither are the French,” he said. “It’s a hook to go and look for the lost sheep of the National Front.”

Simone Veil, a beloved former government minister and Holocaust survivor, found herself denouncing Mr. Sarkozy’s idea shortly after she endorsed him for president.

“I didn’t at all like this very ambiguous formula,” she told the magazine Marianne. She said a ministry for immigration and “integration” would be a better idea.

Mr. Sarkozy was unfazed. “I want the promotion of a common culture,” he said in reply to his critics.

Indeed, an OpinionWay Internet poll for the newspaper Le Figaro, splashed on the paper’s front page this month, indicated that 55 percent of French voters approved. Sixty-five percent agreed that the “immigrants who join us must sign up to the national identity.”

Although the poll was conducted using a representative sample via the Internet, not by using more reliable telephone surveys, it was widely cited as evidence that the French wanted a more restrictive immigration policy and that they wanted Muslims here conform to secular French customs.

But Mr. Sarkozy’s proposal has revived memories of the Vichy era. The idea of a national identity ministry has been compared to the General Commissariat of Jewish Affairs, which was created with ministerial rank under the Vichy administration. “Only Vichy developed administrative structures in their efficient way to defend a certain concept of ‘national identity,’ ” the columnist Philippe Bernard wrote in Le Monde last week. He said that the Commissariat, “even before being a tool in the service of the policy of extermination, responded to the objective of purification of the French nation.”

Some conservative Jewish voters, who were planning to vote for Mr. Sarkozy because of his staunch support of Israel, say they now are considering shifting to Mr. Bayrou.

Despite Ms. Royal’s criticism of Mr. Sarkozy, she followed his lead by wrapping herself tightly in her own mantle of nationalism. She started by encouraging her supporters to sing “La Marseillaise,” the national anthem and the rallying cry of the right, at the end of her rallies.

Last week in southern France, which historically votes for the right and extreme right, she called for a “reconquest of the symbols of the nation” from the right.

She said all French citizens should have the French flag at home, adding, “In other countries, they put the flag in the windows on their national holiday.” And she promised that if elected, she would “ensure that the French know ‘La Marseillaise.’ ”

In the end, both camps acknowledge that they are trying to appeal to voters on the right.

“Ségolène Royal is taking back the terrain too often abandoned by the left for ages to the right and the extreme right,” said a former defense and interior minister, Jean-Pierre Chevènement, who supports her.

Mr. Sarkozy was more explicit. “Since 1983, we have the strongest far right in Europe,” he said this month. “We must not proceed as if it does not exist. I want to talk to those who have moved toward the far right because they are suffering.”

During a campaign trip last week in the Caribbean, where some of the region’s residents can vote in French elections, Mr. Sarkozy boasted that after he proposed his immigration and national identity ministry, his standing in the polls jumped.

SAN FRANCISCO, March 28 — Intel said Wednesday that it was on track or even ahead of schedule in developing a new generation of chips that would achieve a significant increase in performance without consuming more power.

The new processor families — Penryn, arriving this year, and Nehalam, due next year — will in some cases help Intel catch up technically with its archrival Advanced Micro Devices and in other areas will consolidate performance categories where Intel already leads.

The chips will have wires as short as 45 nanometers, a scale at which 2,000 transistors will fit in the width of a human hair. The resulting chips will have as many as 820 million transistors, making it possible for Intel’s designers to add parallel computing, energy management and graphics to the computing engines that are the mainstay of its business.

Pat Gelsinger, general manager of the company’s digital enterprise group, referring to the pace of Intel’s development efforts, said, “The engine is working, and working well.”

Intel is in the midst of a major overhaul of its business strategy after losing ground to A.M.D. during the last two years. The company’s executives have acknowledged that Intel, the world’s largest chip maker, had been late to respond to challenges in energy efficiency and parallel computing and was racing to catch up.

In a briefing for reporters, Mr. Gelsinger said the Penryn chip family would arrive in the second half of this year. A.M.D. and I.B.M. have said they expect to introduce 45-nanometer chips by mid-2008.

A.M.D. has said it plans to introduce an improved chip code-named Barcelona based on its current 65-nanometer technology during the second half of this year, with four processing cores rather than the current two. On Wednesday, the company said it believed that Intel would not be able to catch up with A.M.D.’s existing designs until it introduced the Nehalem microprocessor generation in 2008.

Mr. Gelsinger described Intel’s approach as a “tick-tock” strategy in which it would make incremental changes with the Penryn processors and then more sweeping design changes with the Nehalam chips. The Nehalam chips will have as many as eight or more processing cores, as well as the potential for built-in graphics and memory control processing and networking.

“It will unlock the full capability of that generation,” he said, referring to the 45-nanometer manufacturing technology.

The technology will in principle allow Intel to create ultralow-power chips, but the company said it was first seeking to increase the speed of its processors without consuming more power than current chips.

In what animal welfare advocates are describing as a “historic advance,” Burger King, the world’s second-largest hamburger chain, said yesterday that it would begin buying eggs and pork from suppliers that did not confine their animals in cages and crates.

The company said that it would also favor suppliers of chickens that use gas, or “controlled-atmospheric stunning,” rather than electric shocks to knock birds unconscious before slaughter. It is considered a more humane method, though only a handful of slaughterhouses use it.

The goal for the next few months, Burger King said is for 2 percent of its eggs to be “cage free,” and for 10 percent of its pork to come from farms that allow sows to move around inside pens, rather than being confined to crates. The company said those percentages would rise as more farmers shift to these methods and more competitively priced supplies become available.

The cage-free eggs and crate-free pork will cost more, although it is not clear how much because Burger King is still negotiating prices, Steven Grover, vice president for food safety, quality assurance and regulatory compliance, said. Prices of food at the chain’s restaurants will not be increased as a result.

While Burger King’s initial goals may be modest, food marketing experts and animal welfare advocates said yesterday that the shift would put pressure on other restaurant and food companies to adopt similar practices.

“I think the whole area of social responsibility, social consciousness, is becoming much more important to the consumer,” said Bob Goldin, executive vice president of Technomic, a food industry research and consulting firm. “I think that the industry is going to see that it’s an increasing imperative to get on that bandwagon.”

Wayne Pacelle, president and chief executive of the Humane Society of the United States, said Burger King’s initiatives put it ahead of its competitors in terms of animal welfare.

“That’s an important trigger for reform throughout the entire industry,” Mr. Pacelle said.

Burger King’s announcement is the latest success for animal welfare advocates, who were once dismissed as fringe groups, but are increasingly gaining mainstream victories.

Last week, the celebrity chef Wolfgang Puck announced that the meat and eggs he used would come from animals raised under strict animal welfare codes.

And in January, the world’s largest pork processor, Smithfield Foods, said it would phase out confinement of pigs in metal crates over the next decade.

Some city and state governments have banned restaurants from serving foie gras and have prohibited farmers from confining veal calves and pigs in crates.

Temple Grandin, an animal science professor at Colorado State University, said Smithfield’s decision to abandon crates for pregnant sows had roiled the pork industry. That decision was brought about in part by questions from big customers like McDonald’s, the world’s largest hamburger chain, about its confinement practices.

“When the big boys move, it makes the entire industry move,” said Ms. Grandin, who serves on the animal welfare task forces for several food companies, including McDonald’s and Burger King.

Burger King’s decision is somewhat at odds with the rebellious, politically incorrect image it has cultivated in recent years.

Its commercials deride “chick food” and encourage a more-is-more approach to eating with its turbo-strength coffee, its enormous omelet sandwich, and a triple Whopper with cheese.

Burger King executives said the move was driven by their desire to stay ahead of consumer trends and to encourage farmers to move into more humane egg and meat production.

“We want to be doing things long before they become a concern for consumers,” Mr. Grover said. “Like a hockey player, we want to be there before the puck gets there.”

He said the company would not use the animal welfare initiatives in its marketing. “I don’t think it’s something that goes to our core business,” Mr. Grover said.

Beef cows were not included in the new animal welfare guidelines because, unlike most laying hens and pigs, they continue to be raised outdoors. Burger King already has animal welfare standards for cow slaughter, he said.

The changes were made after discussions with the Humane Society and People for the Ethical Treatment of Animals, known as PETA.

PETA, in particular, has started a series of high-profile campaigns to pressure fast-food companies to change their animal welfare practices, including a “Murder King” campaign that ended in 2001 when Burger King agreed to improve its animal welfare standards to include, among other things, periodic animal welfare audits.

Since that time, PETA officials said they had met periodically with Burger King officials to encourage them to adopt tougher standards. About a year ago, the Humane Society began its own efforts to encourage Burger King to improve its farm animal standards.

Mr. Grover said his company listened to suggestions from both groups, but ultimately relied on the advice of its animal welfare advisory board, which was created about six years ago and includes academics, an animal welfare advocate, an executive of Tyson Foods and Burger King officials.

“Where we think we can support what our animal advisers think is right, we do it,” Mr. Grover said.

The changes apply to Burger King suppliers in North America and Canada, where the chain purchases more than 40 million pounds of eggs a year and 35 million pounds of pork, he said.

A reason that such a small percentage of purchases will meet the new guidelines is a lack of supply, Mr. Grover said.

Burger King plans to more than double its cage-free purchases by the end of this year, to 5 percent of the total, and will also double its purchases of pork from producers who do not use crates, to 20 percent.

Most laying hens in the United States are raised in “battery cages,” which are usually stacked on top of each other three to four cages high. Sows, during their pregnancies, are often kept in gestation crates, which are 24 inches across and 7 feet long.

Matt Prescott, PETA’s manager for factory farm campaigns, argued that both confinement systems were filthy and cruel because the animals could barely move and were prone to injury and psychological stress.

Under Burger King’s initiative, laying hens would be raised in buildings where they would be able to wander around. Similarly, sows would be raised indoors, most likely in pens where they would be able to move freely.

“This is not free range, but simply having some room to move around inside a controlled environment,” Mr. Grover said.

While converting barns for crate-free sows is relatively simple, Ms. Grandin said it was much more difficult and expensive to raise cage-free hens because not nearly as many birds fit in one building.

Burger King officials say they hope that by promoting controlled-atmosphere stunning, more slaughterhouses will adopt the technology. Currently, there are only a few in the United States using the technique, and most of them process turkeys.

Wal-Mart to New York: fuhgeddaboudit.

Frustrated by a bruising, and so far unsuccessful battle to open its first discount store in the nation’s largest city, Wal-Mart’s chief executive said yesterday, “I don’t care if we are ever here.”

H. Lee Scott Jr., the chief executive of the nation’s largest retailer, said that trying to conduct business in New York was so expensive — and exasperating — that “I don’t think it’s worth the effort.”

Mr. Scott’s remarks, delivered at a meeting with editors and reporters of The New York Times, amounted to a surprising admission of defeat, given the company’s vigorous efforts to crack into urban markets and expand beyond its suburban base in much of the country. In recent years, Wal-Mart has encountered stout resistance to its plans to enter America’s bigger cities, which stand as its last domestic frontier.

Much of the opposition to Wal-Mart in cities like New York is led by unions. Organized labor, fearing that the retailer’s low prices and modest wages will undercut unionized stores, have built anti-Wal-Mart alliances with Democratic members of city councils.

Yesterday, labor leaders, upon learning of Wal-Mart’s apparent retreat from New York — or at the very least Manhattan — returned Mr. Scott’s sentiment.

“We don’t care if they’re never here,” said Ed Ott, executive director of the New York City Central Labor Council. “We don’t miss them. We have great supermarkets and great retail outlets in New York. We don’t need Wal-Mart.”

For Wal-Mart, New York City has long loomed as a tantalizing prize — the home of more than eight million consumers and attention-grabbing stores for just about every major retailer in the country.

But Wal-Mart, a cost-minded retailer known for its dowdy merchandise, and New York, a city of excesses known for cutting-edge style, have long had an uneasy relationship.

Wal-Mart executives have argued that low prices would be the universal language that bridged the gap. So far, they have not.

During the questioning, Mr. Scott repeatedly referred to New York, but after the meeting a Wal-Mart spokeswoman, Mona Williams, called to say that Mr. Scott was referring to only Manhattan, not the entire city.

Wal-Mart, which has nearly 4,000 stores in the United States, has sought to open stores in Rego Park, Queens, and in Staten Island, but both plans fell through in the face of intense union, community and political opposition.

Mr. Scott said yesterday that the opposition to Wal-Mart in New York, Chicago, Cleveland, Los Angeles and other cities had a common thread: “The glue is the unions.”

Despite setbacks in each of these cities, Wal-Mart has had success in urban areas. In Chicago, for example, Wal-Mart opened a store last year that attracted thousands of job applicants and has, Mr. Scott said, performed better than expected.

He said that Wal-Mart executives have lobbied for a store in New York, but he said he remains unconvinced. “It’s too hard to make money here,” he said.

Late yesterday, Ms. Williams sought to amend Mr. Scott’s remarks.

“Entering New York has been difficult, but not something we rule out,” she said in an interview. “Lee said he personally didn’t care if we built stores there or not. It might be more trouble than it’s worth, but that he would leave that up to the real estate group that makes these decisions.”

As he does in many public appearances, Mr. Scott was quick yesterday to talk up the chief potential benefit of a Wal-Mart in New York City, particularly for its many struggling residents with modest incomes: lower prices because of the chain’s vast purchasing power and highly efficient distribution system.

Surveys have repeatedly shown that Wal-Mart’s grocery prices are typically 10 to 30 percent lower than those of its competitors.

But labor leaders assert that while Wal-Mart’s prices are low, its wages and health benefits are often so skimpy that they leave many workers below the poverty line and pressure competitors to reduce pay and benefits.

“We don’t like how they do business,” Mr. Ott, the New York union official, said.

But as Mr. Scott sees it, there is another reason Wal-Mart has such a hard time making inroads into some of the nation’s biggest enclaves. Speaking about what he sees as snobbish elites in New York and across the country, Mr. Scott added, “You have people who are just better than us and don’t want a Wal-Mart in their community.”

MOSCOW, March 26 — Only a few visible traces of Yukos Oil remain in Nefteyugansk, a remote Siberian town so inseparable from Russia’s energy wealth that it has neft, or oil, in its name. Here and there, workers’ barracks, trucks and some aging equipment are still painted yellow and green, the color of Yukos’s logo.

The rest of what was once the most valuable subsidiary of the richest Russian company has new colors — black and gold — and a new owner, Rosneft.

President Vladimir V. Putin’s Kremlin has turned Rosneft, the once-forlorn state oil company, into an energy giant almost entirely, as it were, by giving Yukos’s assets a new coat of paint.

On Tuesday, a new phase in that effort begins with the auction of the company’s remaining assets following a declaration of bankruptcy forced by Rosneft.

The auction signals the final stage for Yukos, which is a few months from disappearing into Russia’s state energy industry, following a prosecutorial campaign that began nearly four years ago.

The auction also represents another milestone in Mr. Putin’s campaign to bring Russia’s energy resources under state control. It is being conducted, critics say, in a familiar pattern of Kremlin machinations where a formal, public and ostensibly legal process is accompanied by secretive negotiations where the Kremlin calls the shots. “This is just an illusion, an imitation of process,” Mr. Putin’s former prime minister, Mikhail M. Kasyanov, said in an interview.

First on the auction block is Yukos’s nearly 10 percent share in Rosneft, being offered at a sharply discounted starting price of $7.5 billion, roughly 12 percent below its market value.

Despite a late entry by BP, the winner is widely expected to be Rosneft, which is an organizer of the auction, as well as a bidder and the chief creditor, aside from the state.

The man liquidating Yukos’s assets, Eduard K. Rebgun, has applied to join Rosneft’s board of directors.

Christopher Weafer, chief analyst at Alfa Bank, said the outcome was virtually predetermined. He said the only way to prove that the true price of the Yukos assets had not been deflated to benefit Rosneft would be to hold “an open, fully transparent auction.”

Instead of that, Mr. Weafer said, the bidding is shaping up as a repeat of the wildly rigged auctions in the 1990s that tycoons like Mr. Khodorkovsky used to buy up state property and put together companies like Yukos in exactly the sort of transactions Mr. Putin and his supporters have railed against.

“They have managed to restrict it to those whom they want to win,” Mr. Weafer said. “It is a tried and trusted mechanism that Yukos developed and wielded itself.”

The auction’s first round is planned for Tuesday in Yukos’s headquarters, a nearly abandoned glass and stone high-rise overlooking Moscow’s Paveletsky train station. Once, Mikhail B. Khodorkovsky, the former chairman who is now serving an eight-year prison sentence on charges of fraud and tax evasion that he disputed as politically motivated, had an office on the 17th floor.

Officials have described the process as a legal and fair, despite the criticisms. Mr. Rebgun has said the Yukos assets will be sold for about 30 percent less than their appraised value because they are distressed, in part because of the constraints of a court-ordered timeline to liquidate the property, the outstanding tax claims and environmental complaints raised by the state.

Yukos, though diminished, still has license to 2.3 billion barrels of oil reserves, pumps about 400,000 barrels of oil per day and owns five refineries, a network of gas stations and large stakes in the Russian state energy companies, obtained through share swaps before the bankruptcy.

Those remaining Yukos assets are estimated to be worth more than $22 billion, more or less what the state and the company’s creditors say they are owed.

Mr. Khodorkovsky’s bank, Bank Menatep, bought Yukos for $300 million in a 1996 auction, one of a series of so-called loans-for-shares auctions that were at the center of criticism of privatization in the Russia in the 1990s.

Rosneft became what it is today after acquiring a controlling 76.69 percent share in Yuganskneftegaz in a murky auction that followed the state’s prosecution of Yukos for tax evasion. That sale was once described by one of Mr. Putin’s advisers, now retired, as “the theft of the century.”

The tax authorities seized it in lieu of back taxes against Yukos and auctioned it in December 2004 to an obscure company, Baikal Finans Group, for $9.35 billion, far below its market value, estimated at the time to be $14 billion to $22 billion.

Rosneft in turn bought the subsidiary three days later. At today’s energy prices, it is worth far more, perhaps more than $60 billion, according to energy analysts. The Siberian field supplies refineries now owned by Yukos. If Rosneft wins a bid for these assets, as expected, most of the former Yukos will be reunited under state control.

Few doubt that Rosneft will win. In Russia’s politically supercharged energy industry, any other company wanting to bid would need a nod from the Kremlin first.

That explains why BP’s entry into the auction got a jaundiced reception from government critics. By Russian law, there must be at least two parties to an auction, and until BP entered the fray last week there was only Rosneft.

Just on Friday, the chief executive of BP, John Browne, and his designated successor at the company, Tony Hayward, met with Mr. Putin at the president’s summer home outside Moscow. A spokesman for BP, Robert Wine, said Monday that the meetings had been intended for Mr. Browne to introduce Mr. Hayward to Russian officials. He said he could not say whether the auction Tuesday was on the agenda.

On a recent excursion to Nefteyugansk that was organized by the company, Rosneft executives defended their management of the asset and the role of the state in business generally.

“We try to make sure our shareholders get the best dividends and value,” Sergei I. Kudryashov, Rosneft’s first vice president, said in a briefing for reporters. “There is no difference between us and any private companies, like BP or Exxon.”

He and others in Nefteyugansk highlighted the company’s investments since 2005 in a field that produces 1.1 million barrels per day. They portrayed themselves as good corporate citizens compared to Yukos, paying taxes and spending money on new buildings, like a swimming pool for a city, with a population of 114,000, that has few other public amenities.

“Since Day 1, we have had fruitful cooperation,” said Yuri Y. Alladin, the deputy mayor, whose boss, Sergei V. Burov, was an executive at Yukos and then at Rosneft in the subsidiary before being elected last year. “It wasn’t really stable cooperation before.”