The second-smallest U.S. state is forcing a big change in the food industry.
Kellogg Co., Conagra Foods Inc. and Mars Inc. all announced this week that they will start putting labels on all products made with genetically modified organisms. They followed Campbell Soup Co. and General Mills Inc. in preparing for the July 1 implementation of a Vermont law that requires the change. Creating labels for only one state isn’t feasible, so all packaging has to be overhauled nationwide, executives say.
Food companies and agribusinesses have spent tens of millions of dollars fighting state ballot initiatives to require GMO labels, hoping to avoid a state-by-state patchwork of laws they argue would be expensive and burdensome. Big Food lobbied Congress for a federal solution but acquiesced to Vermont after a bill died in the U.S. Senate last week amid a partisan stalemate. That means a state with fewer than 630,000 residents is setting the course for a nation of 322 million.
“It’s extremely unusual,” said David Just, an agricultural economist at Cornell University. “I can’t think of a good precedent for that.”
Last week, the Senate rejected legislation that would invalidate state rules mandating labels for food containing GMOs. A plan to create a voluntary federal program fell well short of a 60-vote threshold that would have sent the bill to a conference with the House of Representatives to craft a final law. Connecticut and Maine have passed their own GMO-labeling laws, but they contain provisions that they can’t be implemented unless other states follow suit.
Trade groups representing agribusinesses and food companies including Monsanto Co. and Kraft Foods supported the proposal. GMO ingredients are common in food sold in the U.S., where more than 90 percent of corn, soybeans and sugar beets are genetically engineered.
The food companies say scientific consensus proves that GMOs are safe and that labeling is unnecessary and could drive up costs for consumers. Groups opposed to GMOs on ethical and environmental grounds say consumers have a right to know if their food has been genetically engineered.
Even as the industry prepares to meet the requirements of the Vermont law, companies like General Mills, Conagra and Kellogg are holding out hope that Congress will find a compromise and establish a federal standard when legislators return from Easter break next month. Absent that, the concern is that other states will enact laws that are similar but not identical. In that scenario, labels in Vermont might not be compliant with what’s required in other states, said Ken Powell, the chief executive officer of General Mills.
Kellogg joined General Mills is arguing that creating labels for a single state won’t work. It’s impossible to isolate Vermont in a distribution system designed for interstate commerce, according to Powell. And with hefty fines for not meeting Vermont’s requirements, General Mills said it had no choice but to start preparing labels.
“The only way to comply with Vermont is to have all of our labels printed with their requirements,” Powell said in an interview. “The law of the land is Vermont. That’s just a fact.”