Since May 2008, German law has permitted placing a "GMO-free" label on food products within the framework of GMO regulations (EC 1829/2003). It is found in the market along with organic food labels that similarly require the absence of GM products and with labels that designate regional qualities. This paper analyzes the retail price dynamics of organic, GMO-free, and conventional milk after the introduction of GMO-free labeling in Germany. Using weekly data of the GfK consumer home scan, data from German milk sales in the early period of its introduction in 2009 and 2010 were analyzed in a vector error correction model. The results indicated that cointegrating relations exist among prices of conventional, organic, and GMO-free milk. Long-term adjustment parameters indicated that deviations from equilibrium are corrected. According to the results, German dairy companies may successfully defend their price differentials due to adjustments existing between the prices of GMO-free and organic milk.
- Consumer Protection
- Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- Energy, Environmental, Health, and Safety Law
- Economics of Regulation
- Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Agricultural R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
- Agricultural Policy; Food Policy