Hershey feels heat of GE war

SAN FRANCISCO - While biotechnology companies are getting used to opposition from environmentalists, a trend is emerging in the United States that opens a new front in the war on genetically modified foods.

A group of Hershey Foods shareholders - concerned that the company is exposed to unnecessary financial risk by using food ingredients derived from genetically engineered materials - has taken its case to fellow shareholders at the company's annual meeting.

"Our company is clearly exposed to unnecessary reputational and financial risks from the use of genetically engineered ingredients," said Michael Passoff, associate director of the corporate accountability programme at the San Francisco-based As You Sow Foundation.

"These ingredients were made to sell herbicides and pesticides. They provide no financial benefit to Hershey shareholders and no nutritional benefit to consumers."

Concern over the financial risk posed by genetically engineered foods has increased since the massive recall of StarLink corn - a strain of genetically engineered corn not licensed for human consumption that contaminated more than 300 products.

Before the recall, most food companies believed that genetically engineered products posed no financial risk to them. Yet the StarLink recall will cost over $US1 billion ($2.37 billion). Brand name damage will account for extra untold costs.

"The implications for Hershey are significant because it purchases large quantities of milk, corn and soy products, which all contain significant levels of genetically engineered content," said Mr Passoff.

Hershey products are widely eaten by children. Because of parental concerns, baby food makers Heinz and Gerber have already pledged to remove genetically engineered ingredients from their products in response to worries over potential allergic reactions.

McDonald's, Frito Lay and Starbucks are just a few of the food companies that have responded to customer concerns and said they will phase out selected genetically engineered ingredients.

The Hershey group believes continued use of genetically engineered ingredients without improved testing and stricter regulation exposes shareholders to potential liability for health effects that may harm consumers of Hershey products.

Hershey is only the latest company to face a proxy vote on this issue. Nearly 24 similar resolutions have been filed with life science and food companies, restaurants and supermarkets, in what has become a significant shareholder movement.