The use of genetically modified organisms (GMOs) has risen to the forefront of consumer demands for "transparency" as to the origin and ingredients of food products. Although various proposals for GMO labeling have been introduced in state legislatures, Californians will vote on this issue for themselves in the Nov. 2012 election. A law has been proposed that would, if passed, impose stringent requirements and related challenges for the food packaging industry.
Genetically engineered (or "bioengineered") crops are those that have had changes introduced into their DNA to give them favorable characteristics, such as increased yield and resistance to draught and pests. Modern techniques are thus used to breed crops for certain qualities as opposed to traditional methods like selective breeding and hybridization. As of 2011, 94 percent of soybeans and 88 percent of corn planted in the United States—staple crops for the snack food industry—have been genetically modified in some way.
The most fervent proponents of GMO labeling want cigarette-like warning labels based on the belief that genetically modified crop plants are inherently more dangerous to people's health and the environment than traditional crops. However, despite concerns about the impact of "frankenfoods," there is no scientific evidence showing that GMO crops, as a class, are any less unhealthful than their traditional counterparts. Moreover, consumers who want to avoid GMO ingredients can rely on "Non GMO" labels and certified organic products.
Nevertheless, the call for GMO labeling is not surprising. The European Union, Japan, Thailand, Korea, China, Russia and Brazil already have GMO labeling requirements. Such precedent has motivated lawmakers in several states to introduce GMO labeling bills, with Connecticut recently becoming the first state with a proposed bill voted out of committee. On the other hand, the U.S. Senate recently voted down a proposed amendment that would have explicitly "permitted" states to regulate the labeling of GMO food and beverage products. Although this amendment would have precluded the argument that any such regulation is preempted by national labeling laws, its failure does not necessarily mean that states lack authority to require GMO labeling.
In voters' hands
In California, the legislative process is being bypassed by a voter referendum on the ballot in the Nov. 6, 2012, general election. Known as the "California Right to Know Genetically Engineered Food Act," this proposed law would impose extreme labeling requirements on food and beverage products sold in California by:
1. Requiring the repackaging or relabeling of thousands of food products so that (a) raw agricultural commodities are clearly and conspicuously labeled as "Genetically Engineered" and (b) any other foods (defined as "processed foods") are clearly and conspicuously labeled, on the front or back of the package, as "Partially Produced with Genetic Engineering" or "May be Partially Produced with Genetic Engineering";
2. Banning the marketing or labeling of "processed foods" as "natural," "all natural," "naturally made" or expressions "of similar import" regardless of whether such foods contain GE ingredients, with "processed foods" broadly defined as anything other than a raw agricultural commodity, that is, anything subjected "to processing such as canning, smoking, pressing, cooking, freezing, dehydration, fermentation or milling";
3. Authorizing the filing of private lawsuits by "any person" against any retailer, food company or farmer who allegedly violates these labeling requirements without requiring any proof of injury or damage.
If passed and upheld in court, these provisions would impose significant burdens on food producers and packaging companies.
Putting aside the impact a GMO label may have on product sales, the California law would only tolerate GMO content of 0.5 percent in any food without the label, a standard nearly twice as stringent as the 0.9 percent standard used by the European Union. This would require packaging companies to develop robust strategies for avoiding contamination and likely prohibit use of the same equipment for the storage, processing and packaging of GMO and non-GMO foods. After all, virtually any contamination would create significant risks of a costly lawsuit for which the plaintiff would not have to demonstrate damages or harm.
Moreover, given the widespread use of GMO crops and "natural" claims, the labeling requirements likely would require packaging and labeling changes to a majority of consumer packaged foods. With labels already crowded by other labeling requirements and discretionary claims, identifying space for "clear and conspicuous" GMO labeling would present a challenge, especially for smaller and/or single-serve packages.
Finally, it is no accident that GMO-labeling activists have targeted California. California's regulations always have a nationwide impact and, given the dynamics and complexity of national product distribution, it would be difficult—if not impossible—to implement a process that would double a company's SKUs and create one set of packaging and labels for California and another set for the rest of the nation.
If California voters approve the referendum, it likely will be challenged in court immediately on a variety of grounds. Although the provision relating to "natural" claims likely would not survive this challenge, the validity of the GMO labeling requirements is less clear. Accordingly, food and packaging companies should pay special attention to the California results in the Nov. 6, 2012, election.
David TerMolen is a partner and member of the Food Industry Team at the Chicago law firm Freeborn & Peters LLP (http://foodlaw.freebornpeters.com). His areas of expertise include intellectual property litigation and complex disputes with a focus on the food and beverage industry. Reach him at 312-360-6432 or [email protected], and read his blog at http://foodidentityblog.com.