Words and photo by Matt Kelly
Editor's note: This is part three in a weeklong series about GMO Labeling in NYS. Read parts one and two.
Assemblyman Bill Nojay (R-Pittsford) has been an ongoing opponent of labeling in New York State. He is a member of THE Assembly's COMMITTEE ON Consumer Affairs and Protection and previously voted against mandatory labeling.
While multiple requests for an interview went unanswered by the assemblyman, a staffer at his Pittsford office said the assemblyman’s position on the issue has not changed (presumably, he voted against A617 in February). His opposition is based largely on the argument that required labeling will cost New Yorkers more at the grocery store:
“Requiring labeling of GMO products will also cost New York families when they shop at the supermarket. The proposed legislation would require up to half of all food items sold in New York State to receive the new labeling. According to a study completed last year at Cornell University, if mandatory labeling were to become law in New York, the cost of food for a family of four would increase by an average of $500 annually. That’s like an additional tax of $500 on every family in New York State.”
Assemblyman Nojay is referring to a study by William Lesser, a professor at the Dyson School of Applied Economics and Management at Cornell University. Lesser's paper presents multiple scenarios for how the food industry might respond to mandatory labeling, the costs that each of those scenarios might incur for the food industry, and how costs might get passed on to consumers.
The three broad scenarios include how:
- the food industry might simply label the required products
- the food industry might reformulate products with non-GE ingredients
- the food industry might reformulate products with all organic ingredients
Thepaper also considers combinations of these various scenarios. Lesser then concludes that New York families could pay $500 more per year for their food as a result of mandatory labeling.
But actually, Lesser opens by saying food costs could increase by $500 and then never explains where that number comes from. Consumers Union, the advocacy arm of Consumer Reports, analyzed the Lesser study and concluded “There is no discussion of this $500 per family of four or how the cost was even estimated.”
In fact, the only place you’ll find this specific dollar amount is at the very beginning of the study, in the executive summary. Reading to the actual conclusion of Lesser’s analysis reveals that the annual cost to a family of four could be anywhere from $48 to $1,556. Or, it could be $88 to $360 annually if surveys of customer behaviors are used to refine the estimates even more. In either case, there is a huge range of estimates --but absolutely no connection to that initial figure of $500.
It’s worth pointing out that the Lesser study was funded by the Council for Biotechnology Information, as indicated on the title page of the report. The founding members of the council include BASF, Bayer, Dow AgroSciences, DuPont, Monsanto and Syngenta -- companies that manufacture GM seeds and stand to suffer financially if consumers choose to avoid eating GM foods. While there is absolutely no evidence that funding by the council influenced the conclusions of Lesser’s work, this connection certainly brings up the question of industry-favorable results being produced by an industry-funded study.
Consumers Union commissioned ECONorthwest to conduct an independent analysis on the financial impact that mandatory labeling might have had on consumers. The analysis was a review of "existing research presented in academic and other publications relevant to the question of GE labeling costs," including the Lesser paper. ECONorthwest found that the probable cost to consumers would be $2.30 per person per year; that’s $9.20 for a family of four (with a range $1.28 to $60.04) per year.
Unlike the Lesser paper, ECONorthwest did not include the costs of reformulating products with non-GE or organic ingredients in their calculations. Instead, ECONorthwest based their analysis on the same approach used by FDA back in the 1990s, when studying the cost impact that mandatory nutritional labels might have, pointing out:
“FDA states that its model does not consider reformulation costs as “they depend on marketing decisions and are impossible to predict. Moreover, they do not result directly from these proposed rules.”
This highlights a major criticism of Lesser’s analysis: it’s filled with all sorts of possible contingencies that are unpredictable and have no direct connection to the actual steps involved with changing packaging to indicate GM ingredients. But interestingly, Lesser does consider the impact of just these costs in the very first scenario he presents: if the food industry simply decided to comply with a mandatory labeling law and take the steps needed to do so, the annual cost to a family of four would be between $64 to $68.
Moving beyond theoretical considerations of costs, there are also two very big, real-world examples that add some perspective to any discussion of how relabeling and reformulation might impact consumers.
In January of this year, The Campbell Soup Company announced its support for mandatory labeling at the national level and has decided to label all its own products that contain GE ingredients. When it comes to costs passed on to consumers, Campbell spokesman Tom Hushen said in an email to the Organic Consumers Association, “To be clear, there will be no price increase as a result of Vermont or national GMO labeling for Campbell products.”
And throughout 2015 – whether you realized it or not – the Hershey Company was reformulating its products away from GM ingredients. Specifically, Hershey made the decision to move away from using beet sugar in its products; sugar beets are typically grown from GM seed.
Is this going to increase the cost to consumers?
According to Hershey's website, “Our company will invest in higher initial supply costs for some of these ingredient changes, but over time, as manufacturers and suppliers work together on issues that are important to consumers, industry can quickly move and close the price differences to maintain consumer costs. Certified cocoa is a good example. As the demand for certified cocoa increased, the supply responded. Capitalism works."
When it comes to determining the potential cost for consumers that could result from mandatory labeling, it seems best to focus on what will probably happen and not all the things that could possibly happen.
And what will probably happen is this: businesses will do what they always do and protect their bottom line. They will take the most cost-effective course of action and simply label all products as required. If consumers see an increase in costs, chances are it will be an initial increase of $68 or less for a family of four.
That’s around $5 or less a month.