ANALYSIS: Retailers in retreat on Frankenstein foods - Iceland is reaping rewards from its policy on GM food and its retailing rivals are following suit. Alex Jardine reports on how retailers have changed their minds

The major supermarket chains must have been kicking themselves last week as Iceland unveiled its annual results. In a tough climate where the other food retailers are fighting it out on price, the mass market frozen food retailer managed to turn in a strong set of figures, with food sales up by 12% and profits up 10% to pounds 55m.

The major supermarket chains must have been kicking themselves last

week as Iceland unveiled its annual results. In a tough climate where

the other food retailers are fighting it out on price, the mass market

frozen food retailer managed to turn in a strong set of figures, with

food sales up by 12% and profits up 10% to pounds 55m.



The reasons, according to Iceland, included the very public ethical

stance it has taken against genetically modified food. By banning GM

ingredients from its own-label products and launching products such as a

’green’ range of fridges and freezers (called Kyoto after the Kyoto

conference on climate change), Iceland has done wonders for its brand,

drawing new customers into its stores and even winning praise from

Friends of the Earth. But when it called a ban on GM ingredients last

May, Iceland’s stance was derided by other retailers; at a time when

Monsanto was heavily advertising the benefits of GM, they dismissed it

as a PR stunt. Nine months on, with GM foods rapidly replacing BSE as

food’s public enemy number one, Iceland’s approach has definitely

spurred the other supermarkets into action.



But the question of whether GM ’bans’ are genuine investments or

misleading PR still hangs in the air. Tesco - the grocery market leader

- has refused so far to issue a GM ban, claiming it will only do so when

it can truthfully claim to have eliminated all traces of GM ingredients.

A spokesman says: ’We believe other supermarket chains are being

extremely disingenuous to their customers. It is very difficult to

source non-GM ingredients, and to eliminate them from products. We want

to make sure that we can deliver our promises rather than offering

customers false hopes.’



So is Iceland being honest with consumers? Its chairman Malcolm Walker -

the man who claims to have coined the phrase ’Frankenstein Foods’ - was

quick to condemn a recent critical article in The Express, which claimed

that Iceland was incorrect in describing own-brand foods as

non-genetically modified. He argues that because materials can be

transferred at a molecular level, even in the air that we breathe, as a

result the food industry has to work with tolerance levels. Walker said:

’In a climate where tolerance levels have yet to be agreed for

genetically modified food, we work with levels that are under 1%, when

the accepted tolerance level for organic food is 5%. In recent tests at

Iceland, of over 300 products, only one was found to have any trace of

GM materials and this was at a level of one part in half a million.

Anyone with a reasonable understanding of biology or chemistry will know

that materials can be transferred at a molecular level, so it is

impossible to say that no trace of GM can be present at a molecular

level.’



Walker also stresses that the anti-GM stance was not originally intended

as a marketing initiative: ’We were responding to letters from our

customers and it seemed like the right thing to do. Don’t forget that we

had always taken an environmental stance, from banning mechanically

recovered meat to refusing to buy prawns from Norway because of their

whaling.’



Walker insists the GM ban has not been easy. The company has gone to

great lengths to persuade suppliers to buy non-GM ingredients, he

says.



’When we took the decision we faced quite a lot of hostility in the

industry.’ But the power of the retailers means suppliers know they

either comply or lose the business.



Sainsbury’s points out that by working in a consortium it will become

easier to eliminate GM ingredients. ’By combining our buying power with

other supermarket groups we are able to find farmers who are willing to

grow non-GM crops,’ says a spokesman. Tesco now remains the sole major

retailer which says it has no plans to eliminate GM ingredients from its

own-label foods. Many observers feel it is only a matter of time before

Tesco too adopts an anti-GM policy.



Supermarket                 Own-brands   Future Policy

                   with GM ingredients

Tesco                150 out of 20,000   No plans to eliminate

                                         GM ingredients

Sainsbury’s          40-50 out of 1500   Own brands GM free

                                         by end of summer

Asda                    39 out of 4000   GM free in next 3 months

Safeway                150 out of 9000   Gradually phasing out

                                         GM ingredients

Somerfield             150 out of 4000   Asking suppliers wherever

                                         possible to use non GM

Marks & Spencer        100 out of 3000   GM free in 3 months

Iceland                   0 out of 900   GM free since May 1998