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		WORKING  DOCUMENT Directorate-General for Agriculture Economic Impacts of Genetically Modified Crops on the Agri-Food Sector 4.  Consumers, retailers: cascading effects In the EU, where public awareness and debate about GMOs first emerged, retailers have taken a restrictive stance on GMOs. This is giving birth to differentiated markets leading food processors to adapt their products to regional conditions, and US grain elevators to segregate commodities (chapter 5). The present chapter first reviews consumer preferences in different regions of the world through an overview of available public opinion studies (section 4.1). The second section explores the strategy of the retailing industry (section 4.2). 4.1. Citizens/consumers: differences in concerns and preferences Public opinion polls and surveys show differences in consumer perceptions in Europe and in Northern America. In Europe, data can be found in the Eurobarometer studies on biotechnology, which provide comparative data across countries; and in a series of surveys conducted by private polling institutes for the retailing and food industry, NGOs, or the media. This corpus of studies evidences some differences among European countries, with Italians, Spaniards, and Portuguese displaying more positive perceptions of biotechnology in general than their fellow Europeans (Eurobarometer 1997 and 2000; Menrad 1999). Beyond these variations, clear regularities emerge: Knowledge and perception: According to the 2000 Eurobarometer, the use of biotechnology in food production is the most commonly known application. Only 11% of the respondents feel adequately informed on biotechnology. Factual knowledge has hardly improved since 1997. Asked about the source of information they mainly trust, respondents cite consumer organisation first (26%), just ahead of medical profession (24%) and environmental protection organisations (14%). International organisations and national public authorities record poor results (respectively 4 and 3%). High level of concern: A large majority of Europeans are worried about transgenic food. More than 60% of the 1997 Eurobarometer respondents are concerned about the risks associated with GM food, compared with 40% in the case of the medical applications of biotechnology. This result is consistent with those of private polling institutes. The 2000 Eurobarometer has helped assessing the reasons for consumer concerns on GM food. Items gaining the highest support are: "even if GM food has advantages, it is against nature"; "if something went wrong, it would be a global disaster"; "GM food is simply not necessary". The share of respondents thinking that food production is a useful application of biotechnology decreased from 54% (1997) to 43% (2000). Demand for labelling and non-GM: Only 18% of the respondents judge GM labelling useless; 8% do not have an opinion; and 74% favour a clear labelling of GM food (Eurobarometer 1997). 53% of the respondents say that they would pay more for non-GM food, 36% would not (Eurobarometer 2000). For North America, the main surveys reviewed stem from the USDA, Novartis (1997), Time magazine (1999), the International Food Information Council (1999) and some Canadian organisations. Two broad tendencies emerge: Eroding trust in GM food: In 1997, Novartis found that only 25% of Americans "would be likely to avoid labelled GE foods". However, two years later, the poll commissioned by Time magazine indicated that 58% of American consumers "would avoid purchasing [labelled GE foods]" (Center for Food Safety 1999). These results point to a certain erosion in the consumers' trust in GM food. Demand for labelling: In the last four years, the demand for mandatory labelling of GE foods has been high, and fairly stable: 84% of the respondents favoured it in a 1995 USDA survey in New Jersey; 93% in the 1997 Novartis survey; and 81% in the Time magazine poll. In Canada, a 1994 survey showed that "83% to 94% of Canadians polled. want labelling on foods that are produced using biotechnology" (Center for Food Safety 1999). This cursory review shows the contrast between European and North American perceptions of agricultural biotechnology. While Americans and Canadians would hold benevolent views or simply be indifferent, European consumers would display more scepticism for reasons which are said to be: cultural (relation to food, degree of faith in science.), historical (recent food scares in Europe), and political (degree of trust in public/private actors). European consumers see more risks than benefits in GM crops. However, this dichotomy needs qualifying for at least three reasons. First, some issues of concern are "global", even emerging from globalisation, as reflected by the transboundary, multi-faceted mobilisation campaigns against GMOs. Mobilisation started on concerns about the safety of GM food, but other issues were raised: environmental risks, sustainability, benefit-sharing. Second, some differences that once appeared readily between European and North American public opinions have eroded with time. Finally, the two blocks overlap only loosely with geographic boundaries. Not all European countries share the same concerns over GMOs; conversely, some countries outside Europe-Australia, New Zealand-have joined in the mobilisation against transgenic food. While NGOs are expressing citizen concerns, retailers are relaying consumer preferences. 4.2  Retailing industry: following and shaping the demand The contrasts in regional mobilisation and consumer perceptions have had direct consequences on the strategy of retailers. European retailers have moved to meet and further shape the demand for non-GM food, in contrast with the "wait-and-see" approach adopted by the bulk of North American retailers. Faced with growing popular pressure to phase out GMOs and legal uncertainties on GM food labelling, many retailers have adopted a restrictive stance on GM food. Supermarket chains first moved in the UK, and the movement spread to continental Europe in 1999, with a consortium of European supermarket chains being formed in March 1999. Retailers did not align on a single non-GM model. Rather, they adopted various types of actions. Retailers having taken a restrictive stance on GM food mainly focused on own-brands, for which they commit themselves to phase out GE ingredients. Where such phasing out is not possible, compulsory labelling applies, in accordance with EU legislation. Supermarket chains' actions can be differentiated on the basis of two criteria: group v. individual initiatives: Group initiatives, such as consortia or the GM-free working group, enable group members to share the burden of reorganisation of the supply chain and give them additional weight with respect to the food processing industry. On the other hand, individual initiatives are likely to diminish the negotiating power of the chain with regard to food processing. Choice v. no choice: some supermarkets allow GM-labelled foods; others will not sell products labelled as containing GMOs. Yet, others do not exclude GM labelled foods. The retailing industry is the linchpin in the food market due to its proximity with consumers. In addition, over the last years, a global concentration process has increased the market power of retailers. They are in a key market position which allows them to amplify consumer preferences and relay them to the food industry. Moreover, given the transnational character of supply chains, the restrictive stance of European supermarkets has triggered a reorganisation that transcends Europe. Their restrictive approach on GM food has cascading effects back on the upstream side of the food chain, on domestic as well as on foreign markets. Food processors and grain companies have been hard pressed to segregate GM from non-GM products and regionalize their production. [Index] - [Previous chapter] - [Next chapter] [ Agriculture ] - [ Publications ]