An expensive fight in Washington state over whether to label foods with genetically modified ingredients appears to have been decided largely by arguments that such labels would lead to higher grocery costs.
With most of the votes counted, it appears Initiative 522 to require GMO labeling will lose by a 10-point margin. The Grocery Manufacturers Association, a trade group that represents big food companies such as Campbell Soup (CPB), General Mills (GIS), Hillshire Brands (HSH), and PepsiCo (PEP), spent more than $11 million to defeat the ballot measure. Antilabeling donations from DuPont (DD), Monsanto (MON), and Bayer CropScience totaled another $11 million spent to warn that the measure would be “misleading and costly for consumers,” as a DuPont spokeswoman explained.
Labeling supporters weren’t ready to concede defeat Wednesday morning, with about 300,000 ballots uncounted and many of those from Seattle. “This is going to be incredibly close,” said Elizabeth Larter, spokeswoman for the Yes on 522 campaign. Proponents dismissed warnings of higher prices and argued that GMO disclosures on food labels should be no different than existing notices on whether seafood is wild or farm-raised or if orange juice is made from concentrate.
The measure would require foodmakers to label cereal, soft drinks, candy, chips, and other groceries that contain any ingredients that were genetically engineered—a category that would include almost anything made with corn or corn syrups. Food companies shelled out to forestall a patchwork of confusing and expensive rules across the country, with PepsiCo ($1.62 million) and Coca-Cola (KO) ($1.05 million) as the leading antilabeling donors. A similar labeling measure failed a year ago in California, where opponents spent about $44 million to defeat it. Voters in Oregon are expected to see a similar ballot effort next year.
Of graver concern, perhaps, is the prospect that GMO labels would be interpreted by shoppers as meaning “that these products are not safe or that they are somehow different,” says Brian Kennedy, a spokesman for the grocery association. Pepsi, Hillshire Brands, Nestlé (NESN:VX), Campbell Soup and J.M. Smucker (SJM) did not return calls or e-mails seeking comment on the initiative. Coca-Cola referred questions to the Grocery Manufacturers Association.
Supporters of 522 raised about $7.8 million, led by $2 million from Dr. Bronner’s Magic Soaps, an Escondido (Calif.) maker of organic soaps, gels, and lip balms. The company says its spending on social and environmental causes and charities since 2009 has matched its after-tax income. Most of the Yes on 522 campaign’s 10,000 donors gave less than $10, Larter said, and those campaigning against the ballot measure raised less than $1,000 in the state.
Last month, Washington Attorney General Bob Ferguson sued the grocery association, alleging it had shielded the identities of companies that had given more than $7 million for the ballot campaign, in violation of state disclosure rules. The association then agreed to release the amounts it had collected from its members.
A primary argument used in the statewide television advertising blitz was that labels would raise consumer prices at grocery stores and that granola-liberal types in the Puget Sound area worried about modified foods could buy organic products. “They used cost and said that people should just buy organic in Seattle,” Larter says. “Which is stupid, because I certainly can’t afford to buy organic and eat an all-organic diet.”