Vermont’s first-of-its-kind law requiring the labeling of foods containing genetically modified organisms (GMOs) could cost the grocery industry as much as $10 million in fines a day, according to the Grocery Manufacturers Association (GMA). The association made this claim in a recent letter sent to officials in Vermont. Vermont’s state labeling mandate on foods containing GMOs is scheduled to go into effect in July 2016. GMA is challenging the law in federal court. Though the case is pending, manufacturers are preparing for its implementation if need be. But this is proving to be an immense challenge, GMA says.
“The challenges and costs associated with compliance are inordinate and compounded by the fact that the state of Vermont has repeatedly failed to respond to numerous comments we submitted seeking clarification in the implementation of the law, and has yet to provide any guidance on the subject,” wrote Pamela Bailey, GMA’s president and CEO.
In the letter, GMA said the costs to change labels and supply chain systems will be so great that they could exceed revenue to food manufacturers from the sale of products in the state. GMA specifically highlighted the part of the law that calls for fines of $1,000 a day if a mislabeled product is found on Vermont shelves, even if the manufacturer was not responsible for it being in the store. Bailey says even with the best intentions and efforts, 5 to 10 percent of products could easily be mislabeled at a given time.
“Vermont’s law imposes a $1,000 daily fine for each item that does not bear the legally designated label,” Bailey wrote. “We estimate that industry-wide, there could be over 100,000 items sold in Vermont that would require Vermont-specific labels. That means our industry could be facing fines as much as $10 million per day.” Because of these challenges, GMA says it is critical for Congress to pass federal legislation setting a uniform national food labeling standard.
The House Energy and Commerce Health subcommittee held a hearing earlier this month on legislation that would set uniform food labeling standards. Testimony at the hearing on the Safe and Accurate Food Labeling Act warned of the higher food costs and greater consumer confusion from a range of different state labeling mandates and highlighted the need for a uniform national labeling standard. The federal law on GMO labeling would set a national standard and preempt state laws such as the one in Vermont.
“This legislation to protect our national food labeling system has strong bipartisan support, and we are pleased to see Congressional committees holding hearings on the bill to understand the issues,” Bailey says. “It is vitally important that the committees move this bill forward so it can be considered and passed by the House this summer and then in the Senate as soon as possible.”
The GMA, joined by the Snack Food Association, International Dairy Foods Association and National Association of Manufacturers, filed a brief with a federal appellate court last week charging that the district court judge erred in her April 2015 decision not to block implementation of the Vermont law. The four trade associations are challenging the law as a violation of the First Amendment, alleging it imposes burdensome new speech requirements on food manufacturers and retailers.
The Vermont law requires food manufacturers to include a label on certain products containing genetically engineered ingredients to notify consumers that the products are or may be “produced with genetic engineering.” The law also prohibits manufacturers from using the word “natural” or similar words to describe these products. in May 2014, Vermont became the first state to pass legislation requiring labels on food containing GMOs . Other states followed by drafting similar legislation.