Mandatory and Voluntary Labeling Effects

Abstract

In 2022, all foods for sale in the US will be required to carry disclosure labels if they contain ingredients with genetically modified organisms (GMOs). While this is a significant change to labeling requirements, voluntary non-GMO labels already exist to facilitate consumer choice. Past legislative and voter-initiated measures in several states have proposed mandatory GMO labeling, with Vermont being the only state to successfully pass and implement such a law. We leverage a novel dataset from the Non-GMO Project to examine the direct effect of mandatory GMO labeling and the indirect effect of the associated legislative process on demand for voluntarily-labeled non-GMO products. We show that the legislative process heightened consumer awareness of GMO topics and increased adoption of products with voluntary non-GMO labels, even absent actual implementation of mandatory GMO labeling: about one-third of new non-GMO product adoption is explained by the local information environment. We then utilize implementation of the mandatory GMO labeling law in Vermont as a quasi-experiment to show that in the presence of existing voluntary non-GMO labels, mandatory labeling did not have any additional effect on demand. Our findings suggest that voluntary non-GMO labels may already provide an efficient disclosure mechanism without mandatory GMO labels.