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Hershey's - Issue Summary

This resolution asks the company to "Report on the Feasibility of Phasing Out Genetically Engineered Products." In light of the numerous concerns surrounding the presence of genetically engineered products in our food supply, it is our opinion as shareholders that the development of a contingency plan to deal with these highly controversial products is a necessary and prudent business step.

Many food companies had originally believed that only life science companies or

governmental regulators needed to be concerned about genetically engineered (GE) products. Yet the massive recall of StarLink GE corn - which contaminated more than 300 products - will cost over a billion dollars in direct costs to companies all along the food commodity chain line. Brand name damage will account for additional untold costs.

The implications for Hershey are highly significant. Our company uses significant amounts of milk, corn and soy products - these products are among the most heavily impacted ingredients from genetically engineered food crops. Hershey is clearly exposed to unnecessary risks.

Highlighting our concerns are:

  • The company’s exposure to unnecessary reputational and financial risks from use of a product that provides no financial or nutritional benefit.

  • Scientific studies which identify potential environmental and public health risks of GE foods.

  • The lack of long-term safety testing of these products and gaps in regulatory oversight.

  • The growing public controversy and backlash over GE food and crops.

  • The overwhelming support for labeling of GE products by US consumers and international governments.

We do not believe our company should face risk in allowing inadequately tested and poorly regulated products to reach millions of Americans. Nor do we feel it should risk its foreign sales as international markets are soundly rejecting GE products.

The proponents of this resolution, who represent over $22 million in Hershey stock, first approached the company on this issue in November 2000. For nearly three months Hershey ignored our calls, emails, and letters. Finally we were informed that the company "does not want to talk to shareholders on this issue." We hope that you will agree with us that it is unacceptable for management to simply refuse to discuss shareholder concerns on such an important issue.

Consequently, we are asking fellow investors to support this resolution – both as a practical business strategy in responding to serious financial, legal and reputational risks; and as a means of sending a clear message to management that it is accountable to shareholders. Please vote FOR proposal # 3.

 
 
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