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Investing in consumer confidence through genetically modified labelling: an evaluation of compliance options and their marketing challenges for Australian firms

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Abstract:

A significant number of studies have examined aspects of consumer responses towards genetically modified foods (GMFs). However, much of this effort has resulted in somewhat mixed findings which have not added real value in terms of providing viable directions for international and national organisations concerned with the labelling of GMFs. This is particularly true in an environment where labelling regulation is increasingly inconsistent and may therefore present real barriers to international trade and the marketing and sales of these food products.

The aim of this article therefore is to shed light on the extent to which the labelling impositions on genetically modified foods would impact on the overall viability of the GMF industry particularly from an international and firm perspective. To this end, a selection of literatures that cover labelling issues in Europe, USA, Canada and Australasia were distilled in order to better understand the pros and cons of labelling disclosures globally and from these present a platform for future marketing and implementation scenarios in Australia.

On the basis of this literature synthesis, we propose that the success of the GMF imperative is contingent on two levels of compliance. First, at the global level, there is need for greater international consensus regarding uniformity of standards of regulation that would allow for fair trade particularly through such bodies as the World Trade Organisation. By implication, Australia would require to adopt levels of compliance that are comparable to the stringent European Union requirements in order to be able to access those markets and any others. Second, we note that at the firm level, whilst production costs in developing appropriate labelling disclosures can be expected to rise on account of higher standards of compliance, these would be more than offset by the increase in consumer confidence as a consequence of the opportunity to make more informed choices. This in turn would generate positive Word of Mouth most likely resulting in increased uptake and adoption of GMFs generally thus allowing for disclosure costs to fall over time.

Keywords: GENETICALLY MODIFIED FOODS; GM LABELLING IN AUSTRALIA; GM LABELLING IN EU; LABELLING

Document Type: Research Article

DOI: http://dx.doi.org/10.1362/026725708X326020

Publication date: July 1, 2008

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