are analysts saying? What are the liabilities?

CONSUMER BACKLASH:

• Boycotts and consumer action: Hershey is one of over 15 major US companies that have been targeted for some form of consumer action. On March 20, 2001, Starbucks was the target of a 100-city protest, which caused it to examine its product line and offer alternatives to GE products such as milk made from bovine growth hormone. Milk is a product used in great quantity by Hershey.
• Overwhelming public support for labeling: Dozens of US media, government and industry opinion polls repeatedly show 70 - 94% of American consumers support labeling of GE food. Labeling legislation is pending in several states and already exists in dozens of countries.
• Different voices, same concerns: Concern over GE food has come from a wide variety of sources. The US Chefs Collaborative is trying to eliminate GE foods from menus. Parental concerns forced Heinz and Gerber to remove GE products from baby food. Scientists, the media, religious, environmental and consumers groups have all called for caution.

MARKET BACKLASH

• US companies: that have begun removing GE ingredients from their products include: Frito Lay, Heinz, Gerber, McDonalds, Starbucks, Whole Foods.
• International: operations avoiding GE foods include Hershey competitors Nestle, Mars, Cadbury. The Biosafety Protocol, signed by over 130 countries, upholds a country’s right to ban GE food.
• US crop exports have dropped dramatically. American Corn Growers Association said GE crops cost farmers $700 million in lost markets. Exports to Europe alone have virtually ceased since 1998.
• Four of the five top Ag-Biotech units were spun off from parent companies to reduce liabilities. These include Pharmacia / Monsanto, Astra Zeneca, Novartis and Aventis.

ANALYST WARNINGS:

• A 2001 internal industry study for Kellogg, ConAgra, Unilever, and Aventis, predicted up to "billions" of dollars in food industry losses.
• Ag-biotech firms fell 11% in 2000 on Burrill’s index, while medical biotech firms rose 58 %.

• "GMO’s Are Dead" was a 1999 Deutsche Bank report advising investors to sell shares in companies developing genetically modified organisms.

STARLINK:

• Nearly 300 kinds of products were recalled from US supermarkets and grocery stores because of suspected contamination with StarLink corn, a biotech corn not approved for human consumption. Costs to Aventis alone, the maker of StarLink, are expected to reach $1 billion.
• The StarLink recall affected every part of the food supply chain - biotech firms, seed vendors, farmers, grain elevators, millers, distributors, food companies, restaurants and supermarkets – demonstrating the high risks involved with developing and safely regulating GE food and crops.

LITIGATION:

• Lawsuits at agri-business and governmental agencies focus on inadequate testing of health and environmental impacts, allergic reactions, falsifying test results, financial loss from contaminated crops, and labeling needs for religious dietary laws.

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