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Nov 8, 2012

Cost, Liability Fears Sink GMO Labeling

Industry prevails in $46 million campaign against California’s Proposition 37, contending compliance would cost consumers up to $400 a year.

Cost, Liability Fears Sink GMO Labeling

Even with Prop 37 defeated, California may see lawsuits seeking to end the labeling of products containing GMOs as "natural.” [© Monkey Business - Fotolia.com]

  • Industry arguments about additional consumer and business costs resonated with California voters, who on Tuesday defeated a ballot measure that would have forced the labeling of genetically modified organisms (GMOs) to a standard stricter than in Europe.

    Proposition 37 would have required that manufacturers using 0.5% GMO material as of 2014—and any quantity as of 2019—in raw agricultural commodities and processed foods label their products “in clear and conspicuous language,” with the phrase “Partially Produced with Genetic Engineering” or “May be Partially Produced with Genetic Engineering.” California’s threshold would have been smaller than the 0.9% GMO material used by the European Union (EU).

    Supporters of the California Right to Know Genetically Engineered Food Act—a coalition of environmental, consumer, and public health groups, plus smaller food retailers, and even food manufacturers (many of “natural” or “organic” foods) named “Yes on 37”—insisted any increases would be minimal and an affordable trade-off for learning just what is in those genetically-modified soybeans or corn.

    But in their campaign against the measure, opponents of the measure—a coalition of GMO seed companies, farmers, chain retailers and larger food producers named “No on 37”—successfully spent $46 million to warn that Right-to-Know will cost California households up to $400 annually, as producers pass on costs whether they try to substitute with organic or non-GMO ingredients, according to a report issued for GMO supporters by Northbridge Environmental Management Consultants.

    [For more on Proposition 37, see "Weighing the Costs of GMO Labeling".]

    “The cost to consumers would be reflected equally in the cost to businesses. Not only do businesses have the costs that they have to pass on to consumers, but they would also have whatever additional costs they would have for liability as a result of this law,” Mark C. Goodman, a partner in the San Francisco office of the law firm Hogan Lovells, told GEN.

  • "You Would Have Liability"

    “If you’re the manufacturer, you’d obviously have labeling costs to change the labeling on all of your products and make sure that the labels are accurate and complying with the law. As a retailer, because you would have liability, you’d have to make sure any products that you sold complied with the law,” Goodman said. “You’d have to have somebody dedicated to figuring out that what you were selling on your shelves was properly labeled, whether by the product itself or by having the retailer put a label out like a sign telling whether something was genetically modified or not.”

    As for the safety of GMOs, Goodman said, “I just don’t think there’s enough science out there to know whether something like Prop 37 is really worthwhile.”

  • AAAS Opposes Labeling

    The issue of safety was amplified on Oct. 20, when the American Association for the Advancement of Science issued a statement opposing the labeling of GMO foods: “Legally mandating such a label can only serve to mislead and falsely alarm consumers,” AAAS concluded.

    Without citing Proposition 37 or the California controversy, AAAS noted that FDA doesn’t require GMO labeling unless the absence of such information poses a special health or environmental risk—critics counter that FDA’s testing is voluntary—and that studies by the European Union, World Health Organization, American Medical Association, the National Academy of Sciences, and the British Royal Society concluded that no additional danger was posed by consuming food with GMO ingredients.

    Proposition 37 supporters cited a study by researchers at France’s University of Caen, published in Food and Chemical Toxicology, in which half the male rats, and 70% of female rats, died prematurely after consuming Monsanto's genetically-modified corn seed NK603 and Roundup herbicide, compared with just 30% and 20% in a control group.

    Critics note the Caen study tracked the health of the rats throughout their life span rather than stop at 90 days; tumors and organ damage suffered by the rats became evident only after four months. But the study drew fire from several scientists, who went public with complaints the study had not disclosed how much the rats were given to eat, and that the strain of rats studied was prone to mammary tumors following unrestricted food intake.

  • “Orwellian Argument”

    The AAAS statement was challenged quickly by Patricia Hunt of Washington State University and 20 other scientists, who noted that some consumers choose foods based on sustainability, including potential health effects on farmworkers and the environment due to intense chemical use, while others wish to support reduced-chemical farming, or want food that approximates what past generations ate.

    “This powerful instinct will always exist among certain groups regardless of scientific advances and safety analyses,” the group of 21 scientists wrote. “Thus, the [AAAS] Board’s paternalistic assertion that labeling of GM foods ‘can only serve to mislead and falsely alarm consumers’ is an Orwellian argument that violates the right of consumers to make informed decisions.”

  • “Natural” Challenge

    Even with Prop 37 defeated, Goodman expects California will see lawsuits seeking to end the labeling of products containing GMOs as "natural.” With no legal definition of natural to use, he said, plaintiffs would likely urge courts to apply the popular understanding of "natural" as something that is unmodified.

    “The problem for plaintiffs' lawyers is that it is difficult to certify a class for these cases, as not all consumers buy products because they claim to be ‘natural.’ That is why Prop 37 was going to be such a boon for plaintiffs' lawyers—they would not have to show that all consumers bought the products for the same reason, which is very difficult,” Goodman said.

    Had Proposition 37 passed, Goodman said, it could have been challenged in court on grounds of violating the U.S. and state constitutions.

    “There would obviously be First Amendment grounds to challenge something like this,” namely that Prop 37 required a speech regulation without rational relationship to a public interest, Goodman said. “The law has to have some rational relationship to a public interest. The question is whether this GMO issue is really a significant public interest that requires imposing a law.”

    The restriction is somewhat similar, he said, to graphic anti-smoking warnings that tobacco companies were able to overturn in August in the U.S. Court of Appeals for the Federal Circuit through a First Amendment challenge.

    Proposition 37 failed by 54% to 46%, according to unofficial results, with 82% of California precincts reporting.


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