Frito-Lay's Halfway Measures Banning GE Corn
Freak Out Their Competitors

New Seed Planted in Genetic Flap

By Justin Gillis
Washington Post Staff Writer
Sunday, February 6, 2000; Page H01
http://washingtonpost.com/wp-srv/WPlate/2000-02/06/061l-020600-idx.html

Over the past year, as their counterparts in Europe have given in to
consumer fears and pulled food products containing gene-altered ingredients
off the shelves, major U.S. grocery chains and food producers have presented
a united front.

There is no evidence that such products are unsafe to eat, the companies
said, and no sign that American consumers are worried. And, they argued,
safeguards are in place to make sure genetically modified crops don't harm
the environment. The only major U.S. companies to break ranks with this
position were baby-food producers, a special case.

Until now, that is. Many in the industry were caught by surprise when
Frito-Lay Inc. of Plano, Tex., asked farmers not to sell it genetically
modified corn for use in Fritos corn chips or Doritos tortilla chips.

"If you're one of Frito's competitors, you're saying, 'What are [they] up
to?' " said an executive at a company that competes with Frito-Lay,
insisting on anonymity. "Are they getting ready to jump out from behind a
bush and bash us with a label" boasting that Frito products are free of
genetically modified ingredients?

No, Frito-Lay says, insisting it is merely being cautious. But the company's
move in late January plainly rattled its competitors.

Industry insiders say there is pressure on executives to hold the
pro-biotechnology line, in part because many companies see genetic
engineering as a key to future products that lower cholesterol, boost
immunity or offer other health gains. The companies get few direct benefits
now from gene-altered crops--the benefits go to farmers and seed
producers--but with an eye to future profits, the food companies seem to
want to encourage the growth of agricultural biotechnology.

Frito-Lay, a unit of PepsiCo Inc. of Purchase, N.Y., was detecting
"confusion" among consumers who called its help lines asking about
gene-altered ingredients, spokeswoman Lynn Markley said. Moreover, she
noted, the Food and Drug Administration, which has cleared genetically
altered crops as safe to eat, is now studying the issue anew.

Mandatory labeling of foods containing gene-altered ingredients is one
option on the table. If the FDA took that step, companies would be likely to
rush to reformulate their products to avoid the label--and Frito-Lay would
have a head start.

"Because we're a consumer products company, we're stepping back, sitting on
the sidelines and waiting and watching," Markley said. "It's a prudent step
in which we are waiting to see where the FDA and the industry goes."

More companies are likely to have to deal with the question in coming
months. Some shareholder groups are pushing large food companies to put the
use of genetically altered ingredients to a vote in annual meetings
beginning this spring. The way securities rules are written, most companies
will probably succeed in keeping such measures off their meeting agendas,
but the mere act of squelching dissident investors will force executives to
grapple with the issue.

The environmental group Greenpeace, one of the key players in European
protests over engineered food, recently staged a campy bit of street theater
in downtown Battle Creek, Mich., across the street from the company that has
supplied Frosted Flakes and Rice Krispies to generations of American
children. A group of activists stood near the Kellogg Co. and unfurled
banners decrying Kellogg's "monstrous experiment" on consumers. A costumed
character based on Tony the Tiger--but with pale green skin, beady eyes,
Frankenstein features and an evil grin--offered up nasty-looking green
flakes dubbed "Frankenfood."

Kellogg, a prime target for the activists because of its status as one of
the most trusted American brands, politely brushed off the November protest
and hasn't budged since. Until Frito-Lay, baby-food makers were the only big
U.S. food processors that had sworn off gene-altered ingredients, responding
to the unique concerns that attend their products. It was no big leap for
them--as a rule, they already leave out the preservatives, emulsifiers, oils
and other additives common in processed food. A host of smaller companies,
notably those that sell organically grown food, have also pledged to avoid
gene-altered crops.

The nascent American activism over genetic engineering remains a pale shadow
of its European counterpart. In large parts of Europe, activists have pushed
through labeling laws, brought grocery chains and food producers to their
knees, and forced products known to contain gene-altered ingredients off the
market.

Still, American companies--many of which operate in Europe and have already
had to respond to the concern there--are watching closely to see if the
issue takes hold on this side of the Atlantic. Unbeknownst to most
consumers, the majority of prepared foods on American grocery shelves today
contain ingredients from genetically modified crops, including lecithin from
soybeans and sweetener from corn.

Activist groups are betting that as awareness spreads, more Americans will
become concerned. The nation's major food-products companies say, on the
other hand, that they are seeing little evidence of a consumer revolt--just
a smattering of phone calls among the millions they answer every year. They
decry the "Frankenfood" protests as baseless.

Betty Crocker, her keepers insist, is not serving up poison in her cake
mixes.

"If we thought the products were unsafe, we wouldn't sell them," said Austin
Sullivan, a spokesman for General Mills Inc. of Minneapolis, owner of the
venerable Betty Crocker trademark. "We are not in the business of injuring
our customers."

Markley noted it was easier for Frito-Lay to impose restrictions than it
would be for many other companies. Most of the company's corn--which
represents just one-quarter of 1 percent of all corn grown in the United
States--is produced under contract by farmers who have established
relationships with Frito-Lay. Many other companies, by contrast, buy their
grains on the open market.

Despite this advantage, Frito-Lay does buy some ingredients in bulk,
including oils, that could derive from genetically modified crops. Despite
its best efforts, Markley said, the company won't be able to guarantee that
no modified ingredients have made their way into its products. That is one
reason Frito has no plans to base a marketing campaign on its new policy.

At least 10 food crops containing genetic alterations, from papayas to
potatoes to squash, have been approved for sale in the United States. But
most of the fighting to date has focused on two. A third of the American
corn group is now grown with seeds that have been genetically modified; one
common alteration causes the plants to produce a protein poisonous to
crop-destroying worms (but not to mammals). And more than half the soybean
crop has genetic alterations, including one that allows farmers to douse it
with a weed killer called Roundup.

The modified crops obviously find their way into products containing whole
corn or soybeans, but ingredients refined from the crops get a far wider
distribution than that. Corn is the source of a sweetener, high-fructose
corn syrup, that is used in colas, candies and thousands of other products.
Ingredients from soybeans--notably lecithin, used to improve texture--make
their way into a majority of the packaged foods sold in this country.

Environmental activists, despite the "Frankenfood" banners, concede that
there is no evidence that gene-altered food could cause health problems,
while insisting that such evidence could emerge years or decades from now.

Their immediate concern is the effects of planting millions of acres of
altered crops. They fear the ecology will be disturbed in unpredictable
ways, and they want long-range testing to guard against the possibility
before the crops are released.

Pressure on food companies is simply a tactic, some activists acknowledge,
to try to cut down on the planting of altered crops.

Charles Margulis, genetic-engineering specialist for Greenpeace USA in
Washington, believes the Frito-Lay decision is an important crack in the
wall of industry resistance. Greenpeace played no direct role in persuading
Frito-Lay, but it was gratified by the announcement.

"I think it's absolutely the beginning of a trend," Margulis said.