Prop 37 Will Not Change Food Prices
According to the only independent economic analysis of Proposition 37, “Consumers will likely see no increases in prices as a result of the relabeling required” by the Right to Know Act. So why does the opposition claim grocery costs will increase by $400 a year? Those figures are based on a discredited report by Northbridge Consulting, a firm with no economic expertise that is best known for opposing recyling laws for the soda pop industry.
Here are the facts about Proposition 37 as it relates to cost:
Manufacturers continually update labels, and do not pass those costs on to consumers: Prop 37 gives companies 18 months to change their labels to add information about genetic engineering. Most companies change their labels within this time frame anyway. Arran Stephens, president of Nature’s Path, explains, “We, as with most manufacturers, are continually updating our packaging. It's a regular cost of doing business - a small one at that - and is already built into the price consumers pay for products. Claims that labeling genetically engineered foods would increase the price of food for consumers just aren’t true. Companies would certainly be updating their packaging for other reasons within the 18 months they will be given to comply with the new law, and could simply make the additional GMO labeling changes at the same time.”
Labeling costs are low: The average “one-time expense” to redesign labels represents 0.03% of the average annual per-product sales, according to the independent economic analysis of Prop 37 conducted by Joanna Shepherd Bailey, Ph.D., a tenured professor at Emory University School of Law.
Labeling gone wild: The same companies opposed to Prop 37 take advantage of every inch of food packaging space to convince shoppers to purchase their products, yet argue this single, one-time label would be too costly. In recent years, the FDA, in recognizing that food companies’ “front of package” labeling is so out of control, commissioned two Institute of Medicine reports to make recommendations to add clarity for consumers.
The European Union, Japan, China and many other countries already require labeling of genetically engineered foods, and they don't have higher food costs due to labeling -- only a more informed public. According to David Byrne, former European Commissioner for Health and Consumer Protection of the European Parliament, when the European Union introduced GMO labeling in 1997, "it did not result in increased costs, despite the horrifying (double-digit) prediction of some interests.”
As Dr. Bailey’s report notes, “Finally, even for sellers that may otherwise increase prices to pass on the expense of relabeling, empirical studies show that the fear of losing customers in the competitive food industry will be a deterrent to changing prices. Thus, the prices for many food products will not change as a result of the Right to Know Act.”
No new bureaucracy or red tape either: According to Dr. Bailey's report, Prop 37 will result in negligible costs for the Department of Public Health and will have a "trivial impact on California's budget" -- increasing total state expenditures by an average of only .0008%.