Wall Street Covers the Oregon
Labeling Initiative

September 30, 2002

Food Industry Is Campaigning Against Oregon GMO Proposal


Buried among six other ballot measures in Oregon this November is an
initiative that could upend the way the U.S. food industry operates.

Measure 27, the first of its kind to go before U.S. voters, would do
what Congress and the U.S. Food and Drug Administration have declined to
do -- require food companies to label products that contain genetically
modified ingredients. About 70% of processed food contains genetically
modified corn, soybeans or some other crop, according to food industry
groups. Such crops -- which haven't been shown to cause health problems
-- resist pests and weed killers and are easier for farmers to grow.

With the Oregon voter initiative, proponents of labeling may have found
the food and biotech industries' Achilles' heel. By putting the labeling
question before consumers, rather than politicians, such a law is more
likely to be approved.

National polls repeatedly have shown that when asked if they would like
to see information about genetically modified ingredients on food
labels, an overwhelming majority of consumers answer "yes." Organizers
of the Oregon measure collected more than 100,000 signatures to get the
measure on the ballot. They've heard from labeling proponents in seven
other states interested in introducing similar initiatives.

"If the food is so safe and the technology is great, why not put a label
on it and let me have a choice?" says Donna Harris, a Portland mother
who formed Oregon Concerned Citizens for Safe Foods, the group leading
the labeling campaign.

The food and crop-biotechnology industries are raising a war chest to
fight the ballot measure. In documents slated to be filed Monday with
the state, the industries' group -- the Coalition Against the Costly
Labeling Law -- will report it raised $4.6 million in cash in the seven
weeks ended Sept. 20. The group has so far spent about $1.9 million. Of
the money raised, about $3.7 million came from Crop Life International,
a biotech trade group. Most of the rest came from food companies,
including PepsiCo Inc., General Mills Inc., Kellogg Co., ConAgra Foods Inc.,
Sara Lee Corp. and H.J. Heinz Co., according to Pat McCormick, head
of the antilabeling campaign.

By contrast, the pro-label group has raised about $84,000 in cash, loans
and in-kind contributions and has spent about $72,000 in about the past
1½ years, according to the Oregon secretary of state's office. The
group's largest contributor is Mel Bankoff, founder of Emerald Valley
Kitchen Inc., a Eugene, Ore., organic food company, who gave $47,500,
most of it in loans, state records show.

The U.S. food and biotech industries have opposed similar laws,
concerned that the labels would stigmatize their products unfairly. Such
labels, required in parts of Europe and Asia, are "scary sounding," says
Ken Yates, vice president of government affairs for the Northwest Food
Processors Association, a Portland trade group.

Such a law would create a logistical headache for farmers, food makers
and supermarkets. Could the industry apply special packaging to products
destined for a single state? Such a system is possible, food industry
groups concede, but it would require major, costly changes. Perishable
products, such as bread and milk, often are produced locally, making it
easier to comply with a state labeling law. But food companies make many
processed foods at plants that often serve the entire country.

"They'd have to have an Oregon market and a market for the rest of the
U.S.," says Stephanie Childs, a spokeswoman for the Grocery
Manufacturers of America, a trade group representing large food
producers. "It's one thing to set up a system for North America, set up
a system for Southeast Asia, but to set up a system state by state?"

While food makers track products through lot numbers for recall
purposes, food can change hands several times before it reaches its
final destination. Food brokers buy products and sell them across the
country. Other foods go to supermarket distribution centers, which can
send products to retailers in different states.

The Oregon measure, which would likely face court challenges if passed,
would require labeling of food sold in the state, as well as of products
made or housed in Oregon and distributed to other states. The
ingredients used in such products would have to be tracked carefully; a
cake-mix maker, for example, would have to know if the hens that laid
the eggs used in the mix ate genetically modified feed.

The campaign is heating up. A state packet explaining ballot
initiatives, which will be mailed to voters, has 20 pages of published
comments for and against the labeling provision. Oregon is the only
state where all ballots are mailed to voters.

The anti-labeling group plans TV and print ads and mailings. Already
about 330 road signs, many erected alongside farms, tell voters to "VOTE
NO ON 27, THE CO$TLY LABELING LAW." The 41-year-old Ms. Harris insists
she and her campaign aren't a front for any industry. "I'm really just a
mom," she says.

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