Financial threat in Frankenstein foods
by Trevor Webster
This is London
March 18, 1999
How supermarkets, manufacturers, restaurant groups and
fast-food chains react to the growing consumer scare over
genetically-modified products could have a huge bearing
on their businesses and their share prices. Trevor Webster
casts an eye over the policies of the front-line firms.
Asda, the aggressive supermarkets chain headed by
Archie Norman, caused flutters in the dovecotes of its big
rivals and food manufacturers recently when it announced
sweeping price cuts and asked suppliers of raw materials
such as soya, maize and tomato purée to stamp out
genetically-modified products in its own-label foods.
It was following the lead set by the Iceland group a year
ago, but Asda is a much bigger player and is responding to
genuine alarm among consumers over so-called
"Frankenstein foods" that is eerily reminiscent of the BSE
scare.
Waitrose, the acknowledged super-market leader in
organic foods, moved within days to ban GM ingredients
from its own-label foods and plans to ban them from its
stores. Other big supermarkets rivals, such as Tesco,
Sainsbury's and Safeway, will have to move too because
there are now escape routes for consumers who want to
avoid GM foods and cannot afford costly organic foods.
There can be no doubt that consumers are seriously
alarmed. Surveys show the vast majority have a deep
aversion to GM products and want them clearlylabelled in
food on the supermarkets'\ shelves - usually so that they
can avoid them.
Surprisingly, both the Government and the City seem to
have been caught on the hop. The Government has given
assurances that GM products are all right, but has dragged
its feet on clear labelling and only now seems to be caving
in to pressure from public opinion by halting commercial
growing of GM crops for three years.
A straw poll of City analysts over the past week failed to
find one who had given the subject more than a passing
thought, while managers of ethical investment funds have
yet to formulate a clear policy.
Monsanto, the US chemical giant run by Bob Shapiro and
the biggest promoter of GM foods, admits it has acquired
"bogey-man status". Meanwhile, behind the scenes the
supermarkets chains, food producers and fast-food
businesses are beating a retreat from the new products
they once enthusiastically embraced. Investors should
differentiate between the leaders and laggards because
consumer scares can so easily lead to loss of business.
Remember BSE?
The two supermarket leaders in the rush to curb GM
products are Iceland and Asda.
Iceland, which has always been strong on environmental
issues, banned GM products from its own brands last
year. It also wants other brands clearly labelled.
Asda is also demanding GM-free ingredients in its
own-label brands and wants other brand suppliers to label
their products clearly.
Tesco says it believes in customer choice and honest
labelling and is highlighting all GM products and additives.
It has cut GM products to 50 own-label products out of
30,000 and is looking for alternative sources for those.
Sainsbury's, whose ex-chairman Lord Sainsbury - now in
the Government with responsibilities for science and
technology - has links with GM foods, but has cut the GM
content of its own-label products from 1500 to 50 and
labels them all clearly.
Safeway offers lists of own-brand products with GM
content at customer service desks. It says the list is
continually updated.
Marks & Spencer, which has a high proportion of pricey
ready-made meals using GM products - around 500 out
of 3500 - says it believes they are safe, but plans to ban
them in all St Michael foods within three months. It is
clearly labelling GM ingredients. The food manufacturers
are some way behind the supermarket chains, but are also
swinging against GM products.
United Biscuits, which has used them in chocolate and
feels they are safe, is now pursuing a non-GM policy and
plans to switch to traditional suppliers from the end of this
month. It also believes in clear labelling.
Cadbury says it does not use GM protein and makes use
of only small quantities of derivatives, such as soya oil and
lecithin, in Whispa bars and Double Deckers. Both are
clearly listed on the labels.
Unigate does not use soya protein and where it uses
derivatives such as refined soya oil and lecithin in St Ivel
foods they are clearly labelled.
Northern Foods believes GM products are safe, but
insists on clear labelling and will highlight GM products in
its own brands.
Unilever, with brands like Batchelors, Van den Berghs,
Birds Eye and Walls, uses GM materials in some food
products, including the Beanfeast range, though it has
banned them in Germany under pressure from the Greens.
It says it labels clearly where required by law, but points
out that there is no requirement to label lecithin.
There has been a revolution in fast-food chains over the
past month and they are now rushing to follow
supermarkets in banning GM products. According to a
recent survey by Friends of the Earth, PizzaExpress,
Domino Pizza and Wimpy believe they are GM-free,
Burger King and Kentucky Fried Chicken are going
GM-free, and McDonald's and Perfect Pizza are
considering it.
Whitbread, which runs Pizza Hut, Bella Pasta, TGI Friday,
Beefeater and Café Rouge outlets, has no plans to cut out
GM products because it believes in freedom of choice.
But it says it will identify those dishes that have GM
ingredients.
WHAT WORRIES THE CONSUMERS
Food labelling laws do not work in highlighting GM foods,
additives and derivatives, which include lecithin, soya
beans, soya sauce, soya oil, emulsifiers, glucoses,
dextrose, maize starch, caramel, fructose and tomato
purée.
More than 80% of processed food contains
geneticallymodified products, including many baby foods.
Soya alone is found in 60% of processed foods and 60%
of the US soya crop is genetically-modified.
We could already be past the point of no return with GM
ingredients because they can enter the food chain, like
BSE, through animal feeds. The only escape route may be
organic food.
Greenpeace says it fears GM crops will cross-pollinate
other crops and wild plants. Ultimately, we will not be able
to grow organic food.
© Associated Newspapers Ltd., 18 March 1999
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