GM food avoidance policies to become more expensive, according to new report

GM food avoidance policies to become more expensive, according to new report

London, 21 September 2005: Delivering and maintaining ‘non GM’ policies in the EU food and feed sector is set to become more challenging in the coming year. This is according to new research on the global GM market by three leading European agricultural and food experts[1].

The report, entitled “The Global GM Market: Implications for the European Food Chain. An analysis of labelling requirements, market dynamics and cost implications”, identifies numerous food and feed ingredients in the food chain derived using genetic modification. It also concludes that the availability of non GM soybeans & derivatives from Brazil (the largest supplier) is likely to decline in the next 12 months, resulting in an increase in the price differential between non GM and GM soy - possibly reaching as much as 25%[2].

For livestock product producers (producing meat, milk and dairy products), this widening price differential, for a primary feed ingredient, could result in feed costs rising by between 6% and 10% in the next 1-3 years, and lead to a decrease in profitability of between 9%-29%. This level of loss is likely to be unsustainable.

For manufacturers of products such as cooking oils and margarines, their switch away from using GM derived ingredients has also been adding significantly (over 16%) to raw material costs. This level of additional cost is also set to continue for the next 1-3 years.

The report suggests that these additional costs and feasibility problems (currently largely absorbed by the supply chain), may be unsustainable and may cause many businesses to re-think their “GM-avoidance” policies.

“This is the first time that a serious attempt has been made to quantify the economic impact and feasibility of “GM-avoidance” policies. Many European food businesses which have chosen to apply these policies to their products are likely to be unaware of the extent to which many common food and feed ingredients are obtained from GMOs. These businesses should find the report thought provoking”; according to Graham Brookes, one of the co-authors of the report.

Ends

A full copy of the report can be accessed on : www.pgeconomics.co.uk

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1. This report examines the feasibility and cost of maintaining “GM avoidance” policies.

2. In response to consumer concerns and the requirements of previous legislation, many food businesses have adopted public “non-GM” or “GM-free” policies. In some cases, companies have extended policies to the sale of products (such as milk and eggs) obtained from animals or poultry that have not been fed GM derived animal feed.

3. The legal background against which these policies were developed has recently changed significantly and EU Regulation 1829/2003 now requires all foods and feeds to identify the presence of all derivatives of GMOs, irrespective of whether they can be detected analytically. The legislation applies to all foods and animal feeds and encompasses numerous common ingredients and additives produced directly or indirectly from genetically modified organisms.

4. The research was commissioned by ABE (Agricultural Biotechnology Europe) in response to requests from the food and feed chain about the long term feasibility and cost implications of maintaining “GM avoidance” policies, particularly in the light of increasing availability of GM-derived ingredients and extended EU labelling requirements. ABE is a pan-European communications programme aimed at providing factual and science-based information about agricultural biotechnology - www.abeurope.info.

[1] Graham Brookes (Brookes West, UK), Neville Craddock (Neville Craddock Associates, UK) and Professor Bärbel Kniel (Biotask AG, Germany)

[2] This relates to the soybean price differential for ‘hard IP’ soybeans which may rise from about 10% to 25% - “Hard Identity Preservation”: supplies that have strict IP systems from point of production through the supply chain and which may operate to stricter threshold levels for adventitious presence of GM derived material (eg, 0.1%). Regular testing through the supply chain occurs to ensure that supplies meet buyer specifications.