American families could spend approximately $1,050 more per year on groceries due to Vermont’s new law requiring on package labels for foods with genetically modified organisms (GMOs), according to a new economic analysis released today.
The study, produced by the economic research firm John Dunham and Associates, shows that the effect of Vermont’s law would increase food costs for consumers across the country because of the cost of new labeling systems and because consumers will likely view the GMO labels as warnings, leading food companies to switch from GMO ingredients to more expensive non-GMO ingredients. The impact on the national food supply chain from Vermont’s labeling law will be immense.
The study, “Cost Impact of Vermont’s GMO Labeling Law on Consumers Nationwide,” was commissioned by the Corn Refiners Association.
Vermont’s labeling law will acutely affect low-income families, who pay a higher share of their income on food and other essentials, according to the study. The increase in food costs would take nearly 2.5 percent of the median income of the poorest fifth of the population.
“This is no accident. Vermont’s law applies to food manufacturers rather than local food sales so it would force change throughout the American food supply. This study quantifies the food cost impact that every credible authority expects and underscores the urgent need for the U.S. Senate to pass a national GMO labeling standard,” said John W. Bode, CEO and President of the Corn Refiners Association.
The state by state impacts of the Vermont law can be found on this interactive map.
Vermont’s GMO labeling law is set to take effect on July 1.
- At a minimum, the Vermont law costs consumers across the country about $3.8 billion, or approximately $50 per family, for label changes. However, costs rise substantially as manufacturers shift to reformulate products to non-GMO. Such a switch would cost $81.9 billion annually, or approximately $1,050 per family per year in the form of higher food prices.
- Since low-income families, pay a higher share of their income on food and other essentials, they will be disproportionately affected by the Vermont law. This increase would take nearly 2.5 percent of the median income of the poorest fifth of the population.
- Costs incurred by American food manufacturers to comply with Vermont’s GMO labeling mandate could lead to an increase of nearly 2 percent (1.76 percent) in average food prices nationwide in the first year. These higher grocery costs will likely continue in the years ahead with a total cost of approximately $13,250 per household over 20 years.