Food companies fear even one state GMO label law

(MoneyWatch) Washington state votes on a GMO labeling law today. The money involved is impressive, with $7.7 million in favor and $22 million opposed, according to research from Maplight, which tracks money in politics. The latter came from the likes of Monsanto (MON), DuPont (DD), Pepsi (PEP), Nestle, Coca-Cola (KO), General Mills (GIS), Conagra (CAG), Dow (DOW), Bayer, and BASF.

It's not the first time there's been a public push to require food companies to label products if they contain genetically modified ingredients. Just last year, companies poured $34.5 million into California to defeat Prop 37, with $4.1 million donated in favor. The reason is that companies that are heavy producers or users of GMO technology fear that they have a lot to lose, and that a labeling requirement in even one state could effectively mean a requirement in all.

There are two reasons food companies dislike the idea of labeling GMO ingredients. One is the logistical difficulty it could involve. Food products typically involve complex supply chains, with various main ingredients, flavorings, and materials like oils that might be required for cooking and processing. Even if the main ingredients are not genetically modified, other aspects might be, which could require a GMO label. Getting the information from vendors means depending on a backwards cascading chain that would need suppliers at all levels to track the appropriate information and make it available in a form that is easy to process.

Although the practicalities are a concern, the reason they are fighting it is the fear that people will perceive a GMO label as a negative. Many scientists have said that insofar as such known problems as allergens and toxicity go, GMO foods have been proven safe, and they seem to offer the same nutritional value. But that doesn't mean public opinion favors GMO.

In a 2010 survey, management consultancy Deloitte found that only 21 percent of the public was not concerned about eating GMO foods, while 34 percent was either very or extremely concerned. An ABC poll found that "Americans almost unanimously favor mandatory food labels on genetically modified foods" and 52 percent thought that GMO food was unsafe to eat.

Would things be so bad for these marketing departments if even one state passed a law, even if that made consumers in that state more wary of a company's food products? The short answer is yes. Given the complexities of how food is distributed and sold, it would be difficult to ensure that only certain packaging would be delivered to a state that had a GMO labeling requirement. That could force companies to label virtually everything. A single break in the labeling dam by a populous state with more business than a company could afford to lose could effectively become a national labeling requirement.