Consumers Worried about Genetically Modified Foods despite Mandatory Labeling

The labeling of genetically modified (GM) foods is mandatory in the European Union. Nevertheless, it is easy to unsettle consumers when it comes to differentiate between GM foods and non-GM foods. This is the finding of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim, which analyses consumer behavior by means of controlled laboratory experiments. German consumers require a price reduction of about 50 percent to purchase GM foods. The sales opportunities for GM foods in Germany and the impacts of different labeling regulations on the costumer behavior are spotlighted in the study.

In total, 164 volunteers aged between 18 and 75 participated in the laboratory experiments. The participants bid in real auctions for candy bars and soy bean oil. These products either contained GM or non-GM ingredients. It was the first study in Germany in which participants had to make real purchase decisions about GM foods. In contrast to surveys in which the participants only answer hypothetical questions, auctions give participants the incentive to reveal what they are willing to pay in reality.

The study’s findings indicate that consumers definitely prefer non-GM foods. More than 80 percent of the auction participants offered higher prices for non-GM foods than for GM foods. On average participants demanded a price reduction of about 50 percent to purchase GM foods. GM foods, therefore, are only likely to sell if they are offered at a much cheaper price than non-GM foods.

Current regulations allow additional labeling of non-GM foods with labels saying "produced without genetic engineering" and products labeled "GM-free" are readily found on the German market. The ZEW study shows that this redundant labeling affects consumers’ trust in the current mandatory labeling scheme, shattering consumer confidence in the GM-free character of products that do not carry a label.

As the imminent commercialisation of GM foods in the German market is likely to rise producer incentives to label their product as GM-free, consumers’ lack of confidence in the regulatory scheme may worsen. Policy makers should act promptly to either increase consumers’ trust in the existing labeling regulations, for example through information campaigns, or consider the possibility to change the existing regulation by banning or requiring "GM-free" labels.

Contact

Dr. Astrid Dannenberg, E-mail: dannenberg@zew.de

Dr. Sara Scatasta, E-mail: scatasta@zew.de

Prof. Dr. Bodo Sturm, E-mail: sturm@zew.de