Impact of Genetic Engineering on Consumer Demand

The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable industries. The information should not be relied upon for the purpose of a particular matter. Specialist and/or appropriate legal advice should be obtained before any action or decision is taken on the basis of any material in this document. The Commonwealth of Australia, Rural Industries Research and Development Corporation, the authors or contributors do not assume liability of any kind whatsoever resulting from any person's use or reliance upon the content of this document. In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. Foreword Over the past few years government and industry have made efforts to inform the community about gene technology and to institute regulatory procedures to ensure the safe development and distribution of foods that are genetically modified (GM) or contain genetically modified ingredients. Despite these efforts consumers remain concerned over the risks of GM food and ambivalent as to its benefits. In a recent report commissioned by Biotechnology Australia, Millward Brown (2004) found a significant decline over 2001 to 2003 in the perceived benefits of GM food, whether for health or taste. The prevailing publicity remains negative even though Australian supermarket shelves now carry several food products with GM ingredients. Likewise in Europe, consumer objections to GM remain strong despite the recent approval by the European Commission for a proposal to import GM sweetcorn (Consumer Voice February 2004). In Japan, Reuters (March 2004) reported strong resistance to the prospect of importing wheat from North America that might have contained GM material that could enter the food supply chain. This continuing uncertainty over consumers' response to genetically modified foods both in Australia and overseas presents a dilemma for our production sector and, as a consequence, most industries have chosen a low risk strategy by postponing commercialisation of GM crops. However, in following such a strategy they face the risk of declines in existing, and lost opportunities for future, export markets as other exporting countries gain cost and other advantages through adoption of gene technology (Stone et. al. 2002). Improved understanding of the expected response of consumer markets to genetically modified products would assist producers to better assess the relative import of these conflicting risks and provide economic modellers with a reference for modelling expected trade …