DATE: September 12, 2014
TO: Consumers Union
FROM: Dr. Andrew Dyke and Robert Whelan, ECONorthwest
SUBJECT: GE FOODS LABELING COST STUDY FINDINGS
Consumers Union is the public policy and advocacy arm of Consumer Reports, a nonprofit organization. Consumers
Union supports laws mandating labeling of genetically engineered (GE) food. Oregon Ballot Measure 92, if passed,
would require GE labeling. Consumers Union engaged ECONorthwest for a review of published research on the cost
of labeling foods containing genetically egineered ingredients.
Opponents of GE labeling laws cite high labeling costs from some published studies. Consumers Union and other
labeling proponents cite studies that conclude labeling requirements impose low costs on consumers. Consumers Union
asked ECONorthwest to help resolve the apparent disagreement by independently reviewing, comparing, and summarizing
published research regarding labeling costs.
We used our expertise in economics to compile existing research presented in academic and other publications relevant to the qustion of GE labeling costs. Collected studies include assessments of the cost impact of state ballot initiatives similar to
Oregon’s Ballot Measure 92, and the European Union’s GE labeling regime, as well as the United States Food and Drug
Administration labeling cost model, and academic studies of the global impacts of GE agricultural products. We found some
studies on the economics of GE agricultural products but relatively few that address costs directly related to developing and
applying GE labels. We reviewed the studies with models relevant to the requirements of Oregon Ballot Measure 92.
Our findings from our review of this body of published research are summarized in Table 1.
Many studies consider possible market impacts (e.g., speculation regarding consumer behavioral changes),
and other matters not directly related to the cost of designing and labeling a product as containing a GE ingredients.
A number of these studies report estimates of food price impacts from scenarios in which companies subject to GE
labeling requrements are assumed to reformulate their products to contain only organic ingredients. We did not
consider such scenarios. Rather we approached the question as FDA did in its study of the cost impact of
nutritional labeling. 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.”
We concluded that the median cost of labeling in the studies that provided relevant models was $2.30
per person per year. Relevant cost estimates presented in the studies we reviewed ranged from $.32 to $15.01.
Our review focuses on GE labeling costs incurred by the producers and retailers. These costs do not necessarily
translate directly into increases in the prices consumers pay for food products, as competitive forces may prohibit
retailers from fully passing on some or all incremental GE labeling costs to consumers.
For the full report, click here.