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Will Prop 37 (GMO Labeling) Really Raise Food Prices?

by: Jill Richardson

Thu Oct 04, 2012 at 11:56:52 AM PDT


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"Get the facts" encourages the Coalition Against the Deceptive Food Labeling Scheme (CADFLS), a corporate front group that is flooding California will millions of dollars aimed at defeating Proposition 37, the ballot initiative that will require mandatory labeling of genetically engineered (GE) foods. Genetically engineered foods, also known as genetically modified organisms (GMOs), are foods produced from plants that have had genes from other species inserted into their DNA in order to confer a specific trait.

According to CADFLS, the "facts" are as follows:

"Proposition 37 would ban the sale of tens of thousands of perfectly-safe, common grocery products only in California unless they are specially repackaged, relabeled or made with higher cost ingredients. Prop 37 is a deceptive, deeply flawed food labeling scheme that would add more government bureaucracy and taxpayer costs, create new frivolous lawsuits, and increase food costs by billions - without providing any health or safety benefits."

Increase food costs by billions! Really? No, not really. But one must congratulate the PR geniuses who wrote the above statement for their artful use of many buzzwords that Americans hate - "ban," "higher cost," "government bureaucracy," "frivolous lawsuits," etc. The $26 million and counting the food industry has poured into the Prop 37 fight has certainly bought the best PR staff that money can buy.

Unfortunately, money cannot buy them facts to support such outrageous statements. Not that they did not try. CADFLS partially funded a study by two UC-Davis professors, and the study concluded that mandatory labeling of GE foods would result in increased food prices for consumers and more than $1 billion in increased costs for food processors. How can this be, that simply slapping an additional label on food packages could be so expensive?

The conclusion rests on an assumption that American consumers will not buy GE foods if they are labeled and that food manufacturers will substitute non-GE ingredients in order to avoid the need for labeling. And yes, if such an enormous, disruptive shift in the food supply took place, no doubt it would be costly. But where's the evidence that manufacturers will suddenly eschew GE foods once labeling becomes mandatory?

The study authors base their assumption mostly on the European experience, where GE food labels are mandatory and where few foods contain genetically engineered ingredients because manufacturers fear the consumers would not buy them. But European and American consumers are dramatically different in their attitudes toward genetic engineering, so equating the two is a glaring error.

Americans, by and large, do not know much about genetic engineering, but they report more favorable attitudes toward it than their European counterparts. In a 2012 survey, 38 percent of Americans said they are "somewhat or very favorable toward plant biotechnology," - a number that increases to 49 percent if genetic engineering allows farmers to grow more food to meet the needs of the world's population and 77 percent if genetic engineering can decrease pesticide use. Americans also say they are more likely to support genetic engineering if it can produce more nutritious foods. Only 20 percent of those surveyed said they were "somewhat or very unfavorable" toward genetic engineering.

The situation in Europe is quite different. In 2010, the European Commission found that "on average opponents [of GE foods] outnumber supporters by three to one, and in no country is there a majority of supporters." In market research, Europeans say they would not buy GE food unless it were substantially cheaper than the non-GE alternative, whereas few Americans would opt for non-GE foods if it meant paying more money. Anti-GE sentiments run so strong in Europe, that it's not uncommon for protestors to destroy fields of GE crops, an action practically unheard of in the United States.

Given Europeans' feelings toward GE food, it's no wonder manufacturers take care to avoid using genetically engineered ingredients in Europe. And since Europe grows so few GE crops, it's likely easier and cheaper for manufacturers there to avoid them as ingredients. Will American food manufacturers do the same if Prop 37 passes? Is it worth an additional $1.2 billion in costs to manufacturers to ditch the GE ingredients even though most Americans say they are not willing to pay higher prices to avoid GE ingredients?

Rather than removing all traces of GMOs from their products, food manufacturers could simply continue following the same playbook they've always used. First, segment the market and identify the different types of consumers out there: the budget-conscious consumers who want the cheapest food no matter what; the environmentalists who want organic, GE-free foods even if they cost more; the epicures who seek a gourmet food experience; etc. Then determine how to sell to each segment.

Maybe the budget conscious mom or the junk food loving teenage boy won't bat an eye at a label alerting them that a food contains genetically engineered ingredients, but a Whole Foods shopper buying a box of Kashi will prefer buying a GE-free box of cereal even if it means paying more. And in that case, Kellogg's best move might be removing all genetically engineered ingredients from its Kashi brand and proudly proclaiming "GE free!" on the label. Maybe Kellogg's will even profit from this, as a few former Corn Flakes buyers will switch to more expensive GE-free Kashi.

This is, of course, speculation. But so was the UC-Davis study that assumed American food manufacturers would mimic European ones, resulting in an increase in food prices. Food manufacturers dislike disclosing information that might result in lost sales once consumers find out what they are actually eating, and they dislike statewide labeling schemes that require them to make special labels for individual states. They are uniformly against Proposition 37. But if it were to pass, they could simply add the required labels to all of their packaging for the United States, only add the labels for products shipped to California, or entirely reformulate their products to remove all GE ingredients. And it's likely that different companies will adopt different approaches. But that's not a message that will turn voters against a ballot initiative that they overwhelmingly support.

Full disclosure: I'm on the policy advisory board of the Organic Consumers Association, an unpaid position that involves attending no meetings and performing no duties. I've had only one communication with OCA on Prop 37, in which I turned down taking a job to campaign for Prop 37 because I wanted to remain a journalist and not an activist. But alas, I cannot deny my association with OCA and I do want to disclose it to readers. OCA has been one of the top funders of the pro-Prop 37 Right to Know campaign and OCA's executive director Ronnie Cummins sits on the steering committee of the Right to Know campaign. The facts presented above are my best attempt to find the unbiased truth and the opinions are my own.

Jill Richardson :: Will Prop 37 (GMO Labeling) Really Raise Food Prices?
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I don't think prices will rise either (4.00 / 2)
except in the case of a huge spike in demand for non-GMO corn/soy. And even then, the spike would only last for one growing season. A billion dollars worth? That's laughable. It's not that farmers don't know how to grow non-GMO crops anymore. And the yields will be pretty much the same.

I think that my own food bill would go down because I would no longer be forced to go organic for simple things like veggie burgers, cooking oil (we use safflower now), ready-made tortillas, store-bought bread - all those such things. We've been GMO free for maybe 3 years now?

The cost of printing would be almost nil. Since they print so many cartons, they're regularly making new printing plates. Even if they use fancy branding outfits to make up their boxes and labels, at the very, very most $1,000 for a new file to give the printer is nothing.


$1.2 billion... (4.00 / 2)
Aside from all that you brought up... considering that there are now 311,000,000-something Americans, that number doesn't even sound too high when you think about it.

I'll even send them a check for my $3.85 share if they'll just stop whining already.  ;)


Only $3.85 to get rid of GMOs entirely (4.00 / 2)
As that 'study' assumes will happen would be really, really cheap.

[ Parent ]
The problem I see with that argument (4.00 / 2)
Is that it assumes that people won't want to buy the product once they know what's in it. The response is, "Ok, so you get to con the public in order to make more money?"

I was thinking that too (4.00 / 1)
I'm working on an op ed about it. If you're putting an ingredient - ANY ingredient - in a food and you think your customers wouldn't eat your product if they knew what was in it, you need to remove that ingredient.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
2012 survey of Americans on genetic engineering (4.00 / 1)
Hello, great interview in Acres USA.
As for your Prop 37 article, would you send me the reference for the 2012 Survey of Americans on Genetic Engineering? I live in rural Ohio - the stats are frightening - I can believe it though with all the GE crops grown here. ugh. Thank you. k

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