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GMO labels won’t affect supermarket prices, study says

By Maggie Hennessy , 12-Sep-2013
Last updated on 12-Sep-2013 at 15:31 GMT

GMO labels won’t affect supermarket prices, study says

Requiring food manufacturers to label products containing ingredients from genetically engineered (GE) crops would not mean higher food prices for shoppers, according to an independent study released yesterday by the Just Label It coalition.

Kai Robertson, author of the study and food marketing expert, found no evidence that GE labels would affect retail prices, based on her review of publicly available literature and her own experience. The results of the study, entitled "Why Label Changes Don't Affect Food Prices," were announced during a conference call hosted by Just Label It, a coalition of 650 organizations in support of GE product labeling.

"This just confirms what most consumers already know," said Just Label It executive director Scott Faber during the call. "Adding a few words to the back of a package won't add prices at the supermarket shelf; in particular, there is no evidence that label changes increase the cost of making food."
Supermarket pricing is set based on a number of complex factors, and chief among them are consumers and competitors—rather than a product’s wholesale cost, wrote Robertson, who used to work for the Food Marketing Institute, an association representing supermarkets.

“Researchers have shown that it is the confluence of demand-oriented factors—namely consumer demographics and rival pricing behavior, along with market, chain and store characteristics—that have a significant impact on the prices ultimately paid by shoppers,” she wrote. “While a product’s wholesale cost is an important variable, it has, relatively speaking, less of an impact on retail prices than these demand-related forces.”

Additionally, changes to product labels have an almost negligible impact on the price of an individual product. Food manufacturers regularly make changes to their packaging for myriad reasons, including formula changes, marketing claims, updates to the look and feel of the brand, adding or dropping flavors, and changes in the regulatory landscape. As a result, brands typically do not order more than a year’s worth of inventory of packaging at a time.

The impact on the cost just to put something on your label is essentially zero,” said Jerry Greenfield, co-founder of Ben & Jerry’s, during yesterday's conference call.

“Every year we make changes to between 25 and 50% of packaging,” Greenfield said. “Over the last seven years, we’ve gone through three whole line redesigns—that involves every pint in the line. Evolving packaging is a normal part of doing business.”

Ben & Jerry’s supports required GE labeling and is currently in the process of transitioning its product line to be 100% GMO free by mid-2014.

The study’s release comes as the debate over whether GMO foods should carry a special label is heating up both at the state and federal level.

The FDA doesn’t currently require GE labels on packaged foods despite increased pressure from politicians and consumer advocacy groups alike. Labeling legislation is awaiting a decision by voters in Washington State, and has already been passed in both Maine and Connecticut. To date, 1.3 million Americans have signed the petition calling for mandatory GE labeling. Click here to read the latest on the GMO labeling debate.

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