Food companies appear resigned to GMO labeling

WASHINGTON – Vermont will not implement the nation's first state law making food labels disclose genetically engineered ingredients until July 1. But with 18 days to go, some vending machines in the U.S. Capitol already sell candy in packages that comply with the statute.

Those packages are a signal that the U.S. food lobby may have lost a long, expensive war against mandatory labeling of genetically modified organisms, better known as GMOs.

While virtually everyone agrees there should be a national labeling standard and not a patchwork of state laws, what the food industry wants is an outright national ban on mandatory on-package GMO labels.

But with time running out, some of the food industry's bigger players, including Mars candy company, Golden Valley-based General Mills and Campbell's Soup already have repackaged products to comply with the Vermont law and will distribute those products nationwide.

Behind the scenes, experts say, other companies have doubtless invested in new packaging, too.

"There is a long lead time to make packaging changes," said Kyle Goldschmidt, a professor of operations and supply chain management at the University of St. Thomas Opus College of Business. "Mars adopted this. Hershey didn't. They're at risk if the law holds."

In the next two weeks, the Senate could reach a national compromise on GMO labeling or a federal appeals court could overturn a lower-court decision that denied a request by the food industry to put the Vermont law on temporary hold.

But an outright national ban for on-package GMO labels could still be off the table.

"A final bill must include more transparency and a national uniform standard that works for consumers to avoid subjecting our entire food supply to a patchwork of state laws," Sen. Amy Klobuchar of Minnesota said in an e-mail to the Star Tribune.

Scott Faber, who leads the Environmental Working Group's labeling lobby, said "the pressure is off because many companies have already made packaging changes."

"Any deal that takes place now has to include mandatory national on-package GMO labels, Faber said."

However, a spokeswoman for the food industry's Coalition for Safe Affordable Food called a national standard that includes mandatory on-package disclosure of GMOs "no deal."

As the July 1 deadline approaches, the coalition has put out increasingly urgent calls for action by the Senate, which refused to vote on a national ban three months ago. As of week's end, the Senate had not revisited the issue.

Supporters of mandatory GMO disclosure call it a simple matter of giving consumers information and choices. People in the food industry worry that the labels attach a stigma to products that science says are as safe and healthy as products that are not genetically engineered.

The debate will continue. But for practical purposes, it may be moot.

David Berg, chief executive of the Moorhead-based sugar beet cooperative American Crystal Sugar, strongly believes in the safety and healthiness of genetically engineered food. But Berg told the Star Tribune that "it's not practical" to stop selling food in Vermont rather than label it for genetically engineered ingredients. "The reasonable thing to do," Berg said, "is what General Mills did."

General Mills declined a Star Tribune request for an interview about the evolution of its new GMO labeling policy. The company contributed more than $2 million to help defeat mandatory labeling initiatives in California and Washington in 2013, according to the research group MapLight. In 2014, General Mills filed a declaration in support of a Grocery Manufacturers Association lawsuit to stop the Vermont law.

In March, shortly after the Senate declined to vote on a national ban on mandatory on-package GMO labeling, General Mills said it would label products to comply with the Vermont law and distribute those products nationwide while awaiting a national standard.

In an e-mail exchange with the Star Tribune, a company spokeswoman called the packaging change "costly." Asked whether General Mills would now accept a national law that requires mandatory on-package GMO labels, the spokeswoman said, "The most important thing at this point is that we set a national standard so that we have certainty moving forward."

Minnesota food companies Hormel, Land O'Lakes and the Schwan Food Co. did not provide explanations for how — or if — they were preparing to comply with the Vermont law.

The Vermont attorney general's office will offer a six-month "safe harbor" if the law takes effect, assistant Attorney General Kyle Landis-Marinello said. Any enforcement would focus on "willful violations" of the labeling law, Landis-Marinello said.

For products with GMOs, the law generally requires one of three designations: "produced with genetic engineering," "may be produced with genetic engineering" or "partly produced with genetic engineering." Some exemptions apply, such as USDA-approved meats.

By Jan. 1. 2017, every covered food product will need to have a GMO label to be stocked and sold in Vermont.

St. Thomas' Goldschmidt says the move to a national labeling standard is inevitable. "It would be too hard to manage 50 different labeling standards," he said.

That does not mean that states have no role, explained Don Kettl, a professor of public policy at the University of Maryland and a senior fellow at the Brookings Institution.

The national requirement that cars have catalytic converters originated with a California law, Kettl pointed out. Vermont's population of just 630,000 makes it a minuscule market force, compared with California's 39 million.

Still, Kettl said, the decision of a few big food industry players to accommodate the Vermont law is "important in a lot of ways."

The loss of an anti-labeling bill three months ago has influenced political and business decisions ever since.

"If you fight and lose, how many times do you want to continue fighting?" Kettl asked. "It costs you money and bad publicity each time."

Meanwhile, Goldschmidt said companies choosing whether to change packaging face what is for practical purposes an all-or-none decision.

"If you have to manage one product with two labels, that's incredibly complicated," Goldschmidt said. "It's a logistics nightmare."

Jim Spencer • 202-383-6123