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NPA’s John Shaw discusses stance on Prop 37

NPA’s John Shaw discusses stance on Prop 37
John Shaw, NPA executive director and CEO, illuminates why the trade association reached its decision to oppose Prop 37 and delves into the nitty-gritty details of the ballot’s possible repercussions.

Two weeks ago, the Natural Products Association (NPA) announced it does not endorse Proposition 37, The California Right to Know Genetically Engineered Food Act. While it supports consumers’ right to know what ingredients go into their food products, the NPA has qualms with the enforcement provision found in the ballot.

An official statement reads “Proposition 37 places every supplier, manufacturer, and retailer of food products at risk of unreasonable and frivolous litigation.”

The trade association faced criticism from some in the natural industry who vehemently support the proposition. One blog posted on California’s Right to Know website was scathingly titled “Natural Products Association Sides with Dupont, Monsanto”.

Suppliers, manufacturers, and retailers in the natural industry almost unanimously agree GMOs should be labeled. Last March, Natural Products Expo West in Anaheim saw a massive increase in products containing the Non-GMO Project Verified label. More recently, editors reported that enthusiasm for products free of GE ingredients continues to gain speed at Expo East—currently occurring in Baltimore.

Here, John Shaw, NPA executive director and CEO, illuminates why the trade association reached its decision to oppose Prop 37, and delves into the nitty-gritty details of the ballot’s potential repercussions.

How did NPA reach its stance on Prop 37?

NPA took its time in developing this position through a thoughtful and deliberative process that involved a diverse group of our retailer members and our supplier members. It was made purely based on the California proposition’s enforcement mechanism that is completely unacceptable to our California members.

We completely understand the concerns of our valued California retailers who may take issue with our stance, but as their trade association, we feel we’re taking an appropriate decision solely based on the enforcement mechanism contained within that well-intended piece of legislation.

Prop 37 is often compared to Prop 65, The Safe Drinking Water and Toxic Enforcement Act of 1986. What types of hardships could natural companies face in a manner similar to those of 65?

Under Prop 65, any individual who brings a lawsuit doesn’t have to show they purchased the product or that they were harmed due to the mislabeling of it. This really incentivizes plaintiff’s lawyers to bring cases against food producers using anyone as a plaintiff.

The bottom line is if the party being sued doesn’t settle, it could go to court, and the defending party loses significant resources to prove the plaintiff’s allegations lack of merit. The scope of the proposition is limited when compared to 65—there will probably be fewer lawsuits—but essentially, it’s just as detrimental.

Overall, in Prop 37 cases, plaintiffs can be awarded money based on the entire amount of food that is for sale in the state of California. In other words, the money awarded would be based on the retail price of all food available, rather than the profit that would be made on the sale of the product. So the total amount awarded will probably include penalties, multipliers, fees and costs.

Plaintiffs’ lawyers have huge financial incentives here. This is purely a trial lawyer provision, and the NPA would like to see the enforcement mechanism rectified.

Is there any chance the ballot could be modified to protect natural companies while still enacting GMO labeling?

As with all ballot initiatives in California, it can only be amended by the California legislature to further its intent and purpose. Right now, it’s really unclear how the regulatory process will proceed.

I don’t know whether or not there’s a regulatory implementation remedy in Prop 37 yet. If there’s not, the only way to change the enforcement mechanism is through large and costly litigation or through an amendment by the California legislature.

This proposition kind of befuddles everyone because it’s vague in its intended purpose surrounding enforcement, so it’s creating concern at the NPA and our members because we feel, again, that the enforcement provision is purely a bounty hunter statute that is incentivizing plaintiffs attorneys.

We completely respect the California state legislature for going ahead with this issue, but at the same time it has to be done in the appropriate fashion. And as the leading trade group for natural products, this enforcement mechanism defeats the well-intended purpose of our trade initiatives.

Our statement speaks for itself, we support people’s right to know.

Should we focus attention on labeling GMOs at the federal level?

A state-by-state initiative and legal process surrounding the labeling of any product in any industry is unsustainable. We cannot have businesses subject to 50 different rules and regulations. The only way to properly address the issue is to ensure there is a uniform standard going forward—this creates certainty for any company, whether you’re a small retailer or a large supplier. Therefore, a business professional is able to plan and budget appropriately their resource needs to address regulatory labeling initiatives.

Will there be a national initiative on this? Stay tuned. I think when companies, big or small, start to see the writing on the wall that their business model will be threatened by state-by-state regulatory processes, we’ll see how they react and we’ll see how these individual companies decide to move forward.

We need to express our concerns surrounding the legislation, and we hope this expression makes people think about it before they support it.

Please share your thoughts in the comments below!

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