Why General Mills, Inc. (NYSE:GIS) is Not At Ease – GMO Labeling

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General Mills, Inc. (NYSE:GIS)’s chiefs are a worried lot. Their worry and frustration stem from a lack of national standards to guide labeling of products that contain genetically modified organisms (GMO).

In the absence of national standards for GMO labeling, individual states are drafting their own laws to guide labeling of GMO products. But General Mills, Inc. (NYSE:GIS) fears that would result in a fragmented and chaotic business environment.

Vermont’s divisive GMO law

Vermont is one of the states seeking to compel food companies to appropriately label their GMO products. Vermont’s legislation on GMO labeling is expected to take effect from July 1. A recent attempt by the U.S. Senate to prevent Vermont from rolling out its GMO labeling requirement flopped. The Senate legislation didn’t get enough numbers to move it the next level.

But the collapse of the Senate’s attempted legislation on the issue of Vermont about imposing of GMO labeling laws has only stoked more worries.

Fragmented labeling declared costly

While General Mills, Inc. (NYSE:GIS) intends to begin labeling of its products that contain GMO, the company isn’t comfortable with state by state legislation on the issue of GMO labeling. According to General Mills’ COO, Jeff Harmening, it will be difficult for the company to label its products for only one state. If that were to happen, he said, costs for customers will go up.

Vermont’s law requires General Mills and other food companies to label their products that contain GMO ingredients failure to which they can be slapped with heavy fines.

Food transparency

To accommodate consumer demand for more transparency about the production and processing of the foods they eat, General Mills, Inc. (NYSE:GIS) has created a page on its website that enable consumers to look up for ingredients in various General Mills products.

A number of food companies have also made declarations to either start GMO labeling or stop serving GMO foods at their stores. Whole Foods Market, Inc. (NASDAQ:WFM) will kick off its GMO labeling by 2018 while Chipotle Mexican Grill, Inc. (NYSE:CMG) will no longer serve GMO-based foods.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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