Safeway Faces Competitive And Reputational Risks for Failing to Provide GMO Labeling Information, According to Investors
December 3, 2013 — Safeway* is facing pressure from shareholders to meet the growing consumer demand for labeling of products containing genetically modified organisms (GMOs). Citing this unprecedented consumer concern about transparency and recent competitor action on the issue, the Green Century Equity Fund filed a shareholder resolution today urging Safeway to voluntarily label its private line products containing GMOs.
“Customers have the right to decide for themselves whether or not to participate in the ongoing GMO experiment.” noted Lucia von Reusner, Shareholder Advocate for Green Century Capital Management, which administers the Green Century Equity Fund. “Good business means responding to consumer demand, and shareholders have reason to be concerned if Safeway is unwilling to provide the transparent labeling called for by over 90% of U.S. consumers.”
In a July 2013 New York Times poll, 93% of Americans favored labeling of genetically modified foods.¹ In the past year, bills or ballot initiatives that would require the labeling of genetically engineered foods have been introduced in over 20 states,² with both Connecticut and Maine approving such legislation, and the narrowly defeated Prop 37 in California receiving support from 48.5% of consumers in the nation’s most populous state.³ Sixty-four nations require labeling of products containing GMOs.⁴
“Consumers want to know what is in the food we eat, and it costs nothing for companies to give us that information,” said Jon Fox, Consumer Advocate with CALPIRG (California Public Interest Research Group), adding, “There are many reasons why consumers might be concerned about genetically engineered foods, including the injection of pesticides into the genome of crops, and an uncertainty about their public health impacts.”
Consumer demand for labeling reflects continuing controversy over the risks of GMOs to public and environmental health, which remains unresolved among scientists and the public. A recently released study titled “Long Term Toxicity of Roundup-Tolerant Genetically Modified Maize” found that rats fed GMO corn over a two year period had significantly shorter lifespans due to organ failure and increased tumor growth,⁵ inciting controversy around the long-term health impacts of ingesting GMOs. The effects of GMOs on environmental health also remain unknown, with a September 2013 New York Times article titled “A Disease Cuts Corn Yields” citing genetic modification as a primary factor for the blight which destroyed nearly half of Iowa’s corn crops.⁶ Organizations promoting GMO labeling cite the uncertain long-term impacts of GMOs on health and the environment as grounds for providing consumers with labeling information.
Several companies – including Safeway competitors – have begun voluntarily labeling or phasing out products that contain GMOs. Whole Foods*, a Safeway competitor, announced in March 2013 that all products containing genetically modified ingredients in U.S. and Canadian stores must be labeled as such by 2018, and Trader Joe’s* claims not to source any GMO ingredients. Other companies, including Chipotle* and Ben & Jerry’s*, have adopted policies to voluntarily disclose the presence of GMOs in products. Through its Health & Wellness private brand portfolio, Safeway is working to position itself competitively among consumers interested in all-natural and organic products, and has already faced pressure from consumers regarding labeling of all products containing GMOs.
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Green Century Capital Management is an environmentally responsible investment advisory firm that manages two mutual funds – the fossil fuel free Balanced Fund and the Equity Fund, which invests in the companies that comprise the longest running socially responsible index. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century Capital Management provides people who care about a clean, healthy planet the opportunity to keep their money out of environmentally irresponsible companies and use the leverage of their investment dollars to encourage environmentally responsible corporate behavior.
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