Print

Print


For  Release:     August 19, 2004
For More Information:  Liz Hitchcock or Richard Caplan
202-546-9707
http://www.uspirg.org/reports/dutytodisclose8_04.pdf



FOOD  COMPANIES FAIL TO DISCLOSE SHAREHOLDER RISK OF GENETICALLY ENGINEERED
CROPS

Despite  Requirements, Most Companies Not Following Letter or Spirit Of
The Law

Ninety-five percent of  the top food companies in the United States fail to
properly inform shareholders about the risks posed by genetically
engineered  (GE) ingredients, according to Duty to  Disclose: The Failure
of Food Companies to Disclose Risks of Genetically  Engineered Crops to
Shareholders, a new report released today by the  U.S. Public Interest
Research Group (U.S. PIRG).

While one mistake  involving genetically engineered crops is estimated to
have already cost the  food industry over one billion dollars, and more
shareholder resolutions have  been filed regarding GE issues than any issue
since apartheid-era  South Africa, only two  of the top 35 publicly traded
food companies mention GE ingredients in their  Annual Reports as required,
according to Duty to Disclose.

"Shareholders need to  know about the products their company makes," said
U.S. PIRG Safe Food Advocate  Richard Caplan. "By not disclosing the many
risks posed by genetically  engineered crops, food companies are failing to
meet their legal duty to be  fully honest with shareholders."

Duty  to Disclose describes the risks posed to food  companies from
genetically engineered ingredients, including product liability  lawsuits,
loss of insurance coverage, damage to reputation, consumer rejection,
international renunciation, cross contamination, and economic loss due to
sudden  regulatory changes. While Federal  federal  regulations require
that investors receive full  disclosure of any material facts about the
companies in which they own shares,  only Kraft Foods Inc. (KFT-NYSE) and
Interstate Bakeries (IBC-NYSE), makers of  Hostess Cupcakes and
Wonderbread, disclosed to shareholders that genetically  engineered
ingredients might pose a material risk to  shareholders.

"Just as crops require  sunlight to grow, investors need the ‘sunlight’
provided by full disclosure of  material risks in order to grow their
portfolios," said Michael Leone of Green  Century Capital Management, a
mutual fund company.  "The risks of  genetically engineered foods should be
disclosed so that investors can make  informed decisions," he concluded.

Industry estimates  maintain that 60 to 70 percent of all processed foods
on American grocery store  shelves contain GE ingredients. Human safety
testing by the Food and Drug  Administration is not mandatory, nor are
companies required to label GE  products. A recent poll by the Food Policy
Institute found that 78 percent of  respondents thought it "very important"
that the food they purchase does not  contain GE ingredients, and 94
percent believe that GE foods should be labeled  as such.

Duty  to Disclose makes several recommendations, including  a call for food
companies to remove the financial risks associated with  genetically
engineered ingredients by removing genetically engineered  ingredients from
their products.

"The risks from  genetically engineered food aren’t only to the environment
or human health, but  are financial as well," concluded Caplan.  "Food
companies should stop hiding the  truth from shareholders, and let them
know the risks they face from genetically  engineered crops."

###

U.S. PIRG is the national  advocacy office for the state Public Interest
Research Groups.  State PIRGs  are non-profit, non-partisan public interest
advocacy  organizations.

Green  Century Capital Management, Inc. is the investment adviser to the
Green Century  Balanced Fund and the administrator of the Green Century
Funds.  The Green  Century Funds are the first family of no-load,
environmentally responsible  mutual funds and were founded by a partnership
of non-profit environmental  advocacy organizations.