Discussion Paper

Voluntary GM-Free Labelling

April 2003

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5. Use of a "GM-Free" Label

• 5.1 Overview
• 5.2 Terminology
  • 5.2.1 Alternative Terminology
  • 5.2.2 GM-Free Symbol
  • 5.2.3 Labelling Where There Are No GM Counterparts or Equivalents

Summary

This section examines the use of labels to convey information, and some of the specific issues associated with the use of a "GM-free" label. In particular:

• Labels work by conveying information directly to consumers, either by prompting them to seek further information or by alerting them to information they have already received.
• Information overload can still reduce the effectiveness of labels in conveying information.
• Because it is difficult to determine whether a product is in fact "GM-free", the use of this terminology poses a risk for suppliers. The use of alternative terminology or a "GM-free" "symbol" (supported by additional information to explain the product's "GM-free" status) may go some way to overcoming this risk.

5.1 Overview

A label is a representation by a supplier to do any of the following:

• Convey information directly to a consumer, for example, nutritional information panels.
• Prompt consumers into seeking further information from a secondary source, for example, a website or 0800 number.
• Alert consumers to information already received about the features of a product or production process from advertisements or other information sources. In these circumstances the label serves as a "trigger", it does not impart information itself. The Heart Foundation's "Pick the Tick" does not convey information on the comparable nutritional benefits between products; rather it alerts consumers to the fact that the product has been assessed by the Foundation and meets its nutritional guidelines.

Labels are limited in their effectiveness to convey complex information by:

• Physical restrictions - the limited amount of space available on a product can restrict the amount of information that can be included on a label.
• Information overload - a label competes against a range of other information about a product's performance or characteristics for a consumer's attention. There is a risk that consumers become overloaded with information, and, because of high transaction costs, choose to avoid a product altogether or disregard the label when making a decision.

Applying the consumer and industry "drivers" to the development of a "GM-free" label raises a number of issues about terminology that will need to be considered by stakeholders.

5.2 Terminology

The labelling requirements under Standard 1.5.2 reflect a balance between the difficulty of testing to determine whether a food contains GM material, the provision of meaningful information to consumers, and the imposition of costs and risks on industry.

Finding a balance between the cost and risk to suppliers of making GM-free claims may be made more difficult because of the Commerce Commission's interpretation of "GM-free" under the Fair Trading Act. This interpretation does not allow for the presence of any GM material in a food.

A "GM-free" label could not, therefore, provide a threshold for accidental contamination as is the case with Standard 1.5.2.

This interpretation of "GM-free" also extends to food that results from a genetic modification process. There are substantial difficulties in establishing whether or not a food results from a genetic modification process where:

• the food that results from a genetic modification process does not contain GM material
• modified DNA or protein is eliminated through heating and other manufacturing processes.

5.2.1 Alternative Terminology

To mitigate the risk and associated verification costs of making a "GM-free" claim, suppliers might consider the use of alternative terminology to fill the "information gap". Any supplier, or group of suppliers, considering the use of alternative terminology to reduce risk should seek legal advice on the overall impression of the label under the Fair Trading Act. Examples of alternative labels could include:

• "Not sourced from GM ingredients". This label could be used if the food, or food ingredient, when purchased was free of GM material - but it does not provide an assurance that food is free from accidental contamination by GM material during storage, handling, processing, or manufacturing stages. That is, the label relates to the source of a food, not its final contents.
• "Best endeavour to be GM-free". The intention of this label would be to convey the suppliers' efforts to provide "GM-free" food - but, because of the risk of accidental contamination, avoids making the absolute statement that the food is "GM-free". It does, however, imply that the supplier has taken some steps to source "GM-free" food or food ingredients.

Suppliers will need to consider whether alternative terminology will meet consumer demand for "GM-free" information, and whether additional information is needed to make the alternative label meaningful. For example, a pamphlet or website about the difficulty suppliers face in supplying food that is "GM-free" may support either of the above options.

5.2.2 GM-Free Symbol

Although the term "GM-free" is succinct and may best meet consumer demand, its use poses a risk to suppliers. A label using alternative terminology might reduce this risk, but it could also be clumsy, long winded or need to be supported by additional information to be made meaningful.

The use of a symbol or logo, supported by additional information, might avoid some of these difficulties. A symbol would not explicitly state whether a product is "GM-free". Instead, it would prompt consumers to seek further information about the product, or alert them to information already received from, say, advertising. This information might include steps that suppliers have taken to source "GM-free" food and segregate GM material, but stop short of making a "GM-free" claim.

There is the risk, however, that over time the GM-free symbol will begin to stand for "GM-free" in the pure sense - as consumers will either be unaware, uninterested or have forgotten that the symbol is a signal that there could be some qualifications to a particular supplier's GM-free claim.

5.2.3 Labelling Where There Are No GM Counterparts or Equivalents

Concern has been expressed that it might be misleading under the Fair Trading Act to label foods as "GM-free", where that type of food does not have any GM counterparts or equivalents (that is, no food of that type has been genetically modified). The issue is that consumers may wrongly assume that food not labelled as "GM-free" contains some GM material, or results from a genetic modification process (but is outside of the scope of the threshold requirements for Standard 1.5.2).

Guidance from the Commerce Commission suggests that it would not be misleading to label conventional foods that do not have GM counterparts as "GM-free". While this type of labelling could be seen as exploiting consumer demand for information, it is still legitimate to obtain a competitive advantage over a rival supplier despite there being no commercially available GM foods or food ingredients of that type.

New Zealand suppliers should, however, note that this approach differs from U.S Food and Drug Administration guidelines and Canadian Food Inspection Agency advice. They state that it would be misleading to label a conventional food as GM-free where there are currently no equivalent GM products.[8]

Questions for Submitters

• What terminology should be used for a "GM-free" label?
• Would a GM-free symbol avoid some of the issues associated with use of the term "GM-free"?
• Should a GM-free labelling system extend to food where there are as yet no GM counterparts or equivalents?

[8] US Food and Drug Administration (January 2001). Guidance for Industry - Voluntary Labelling Indicating Whether Foods Have or Have Not Been Developed Using Bioengineering.