Vermont’s GMO labeling law may increase grocery bills for consumers

February 24, 2016

A study produced by the economic research firm John Dunham and Associates and commissioned by the Corn Refiners Association (CRA) shows that American families may spend approximately $1,050 more per year on groceries due to Vermont’s new law requiring on-package labels for foods with genetically modified organisms (GMOs). According to the firm, the increase will stem from the cost of new labeling systems and because consumers will likely view the GMO labels as warnings, leading food companies to switch from GMO ingredients to more expensive non-GMO ingredients. Vermont’s GMO labeling law is set to take effect on July 1.

The study, “Cost Impact of Vermont’s GMO Labeling Law on Consumers Nationwide,” concludes that the impact on the national food supply chain from Vermont’s labeling law will be immense. The findings show that, at a minimum, the Vermont law costs consumers across the country about $3.8 billion, or approximately $50 per family, for label changes. However, costs rise substantially as manufacturers shift to reformulate products to non-GMO. Such a switch would cost $81.9 billion annually, or approximately $1,050 per family per year in the form of higher food prices.

Since low-income families pay a higher share of their income on food and other essentials, the study concludes that they will be disproportionately affected by the Vermont law. This increase would take nearly 2.5% of the median income of the poorest fifth of the population. In addition, costs incurred by American food manufacturers to comply with Vermont’s GMO labeling mandate could lead to an increase of nearly 2% in average food prices nationwide in the first year.

In response to the study, the Consumers Union, the policy and advocacy division of Consumer Reports, stated that the CRA-funded study “drastically overstates” the law’s impact on food prices. “This new study, like previous industry-funded studies, makes a number of unreasonable assumptions to come to its conclusions, including the idea that companies will reformulate all their products to remove GE ingredients. There is simply no basis for these assumptions,” said Jean Halloran, director of food policy initiatives for Consumers Union. “The fact is that GMO labeling would have a negligible impact on food prices. Campbell’s is moving towards labeling GMOs and has said they don’t plan to raise their products’ prices.”

Study (pdf)

Consumers Union statement