Non-GM policy: cost implications

Table 1, Table 2 and Table 3 summarise the nature of non-GM ingredient policies and
their supply availability and cost implications for a selection of food and feed products4.
This covers both the current market position and likely developments in the next 1-3
years. The key points to note are:
• Almost all of the additional costs involved in using certified non-GM raw
materials have been borne by the supply chain up to (but not including) the
retail sector5;
• For a number of food products, where incorporation rates of relevant
ingredients are low (e.g. chocolate confectionery and biscuits, pizza and readymeals)
the additional raw material cost of switching away from GM-derived
ingredients has been relatively small. No significant changes to this position
are expected in the next 1-3 years;
• For margarine manufacturers, the switch away from GM-derived ingredients is
adding significantly (over 16%) to raw material costs. At the EU level, this is
adding possibly up to €85 million to the annual raw material costs to the
sector6. This is also likely to continue in the next 1-3 years;
• For producers of poultry meat, whilst the additional costs associated with using
non-GM protein (soymeal) in diets has added up to 2% to feed costs (at the EU
level, adding between €10 million and €50 million to annual feed raw material
costs7), the negative impact on profitability has been more marked (up to -7%).
In the next 1-3 years, these costs are likely to increase significantly (at the EU
level, adding between €41 million and €129 million to the cost of feed raw
materials), potentially resulting in profitability losses of 9%-29%. These levels
of losses are likely to be unsustainable and continuation of a non-GM protein