GMA in Vermont GMO battle

Usually it’s California causing regulatory headaches for retailers and suppliers, but now tiny Vermont is getting in on the action with onerous labeling requirements and hefty fines that are expected to be a compliance nightmare.

Vermont approved food labeling rules concerning genetically modified organisms (GMOs) that are scheduled to go into effect in July 2016. GMA has challenged those law is federal court and like the retailers it represents and other national trade association would like to see uniformity of regulations as opposed to a patchwork of state and local requirements that complicate operations.

GMA may ultimately prevail in its case against Vermont, but in the meantime the group says food manufacturers must plan for its implementation, and in doing so, are finding even more costs and challenges from the law.

In a letter to Vermont Governor Peter Shumlin, GMA explained that the enormous costs, complexities and challenges for food manufacturers to comply with Vermont’s food labeling mandate show the critical need for Congress to pass federal legislation setting a uniform national food labeling standard.

“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,” Pamela G. Bailey, GMA’s president and CEO said in the letter to Shumlin.

In its letter, GMA said that the costs to change labels and supply chain systems will be so great that these costs could exceed revenue to food manufacturers from the sale of products in the state. The letter also highlighted a clause in the law that holds food manufacturers liable 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 explained that with national food supply chains, even with the best of intentions, excellent supply chain logistics and herculean efforts, 5% to 10% of products might be mislabeled in stores at any given time.

“Vermont’s law imposes a $1,000 daily fine for each item that does not bear the legally designated label,” According to 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.”

The House Energy and Commerce Health subcommittee held a hearing on June 18 that would set uniform, science-based 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, according to GMA.

“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 said. “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.”