The Grocery Manufacturers Association, which represents cereal-maker General Mills, among others, said Friday it intends to sue the state to reverse the law.
Vermont Attorney General Bill Sorrell said Monday the state is prepared. "We're expecting to be sued and we'll put the A-team on the case if and when we are sued," Sorrell said.
Food companies, retailers and biotechnology industry trade groups oppose Vermont's law requiring manufacturers to put a one-line label on products containing genetically modified ingredients starting in 2016. Gov. Peter Shumlin signed the bill at an outdoor ceremony Thursday.
They say GMO crops pose no risk to human health or the environment; instead, they say the law will only increase food prices and complicate interstate commerce.
"The government therefore has no compelling interest in warning consumers about foods containing GM ingredients," the Grocery Manufacturers Association said in a statement late last week. "In the coming weeks GMA will file suit in federal court against the state of Vermont to overturn the law."
The vast majority of commodity crops grown in the U.S. are genetically engineered to ward off pests and withstand heavy herbicide applications. These products are used in the majority of the country's processed foods.
Scientific research is inconclusive on whether GMO products are as safe for human consumption as their non-GMO counterparts. But environmentalists warn these crops can create untamable "super weeds" resistant to herbicides, forcing the agricultural industry to spray more weed-killing chemicals.
"So if as a consumer you're concerned about the long-term health of our nation's soils, water, flora and fauna then that could be a decision as to why you don't want to buy a GMO product," Sen. David Zuckerman, P/D-Chittenden, a longtime legislative leader on the issue, said this month.
But industry groups say GMO production is better for the environment because farmers can produce more crops with less land, water and fuel.
More than two dozen states are considering labeling laws. Connecticut and Maine have passed laws that will go into effect only when neighboring states follow suit - a strategy designed to shield individual states from bearing the cost of trailblazing a policy that is loathed by well-heeled industry groups.
And now the second-smallest state in the nation is has picked a fight with some of the world's largest food manufacturers, including General Mills, a $31 billion company that opposes state labeling initiatives and is a member of the GMA.
Sorrell estimates defending the law could cost $1 million to win and $5 million or more to lose. The state is stockpiling $1.5 million through state appropriations and settlement surpluses to defend the law. The state also announced last week at a bill signing that it is taking private donations through a newly created defense-fund website, Foodfightfundvt.org.
The state anticipates a host of constitutional challenges, including free speech protections, interference with interstate commerce and conflicts with federal law.
The Biotechnology Industry Organization, the world's largest industry trade group representing Monsanto Corp., Dow Chemical and other seed producers, says the labeling law will cost the average household $400 more annually for groceries.
One reason is consumer demand will force food producers to source more expensive non-GMO commodities to avoid what the group calls a perceived "warning" label.
"It's more because of the perception that such a law sends to the consumers. It's essentially a de facto warning," said Karen Batra, a BIO spokeswoman, in an interview Monday.
This is a market decision food producers will have to make, despite indifference on the part of many consumers who care more about calories and prices, she said.
"It's unclear that consumers would want to pay more for GMO crops. Consumers really don't care," she said, citing online polls on the issue. "It all depends on how you ask the question."
National polls indicate that 93 percent of respondents say foods containing genetically engineered ingredients should be labeled. A VTDigger poll shows overwhelming support for GMO labeling in Vermont. The chorus backing Vermont's bill has been about a consumer's "right to know" what is in their food.
She said the labeling law will also complicate interstate commerce, forcing food manufacturers and retailers to segregate GMO and non-GMO products from the store shelf all the way down the value chain to the farmer's field.
It's also unclear whether these food producers will stop selling to Vermont's 626,000 residents altogether. Opponents of the labeling law say it may cost these companies less to exclude Vermont's market than to comply.
"That's just one of these scare tactics that industry folks are trying to build against a law that is very popular," Sorrell said of the possibility sale restrictions in Vermont.
He said attorneys general across the country are putting bipartisan support behind Vermont's law.
"I think this issue of GE food labeling is going to be one that's going to be enacted in other states going forward," he said.
He said the Attorney General's Office will have regulatory rules on the labeling law drafted as soon as late summer. This will include how the label will appear on the food packages. There will be a chance for the public to comment on the regulations, he said.