Kellogg shareholders reject plan to stop using genetically altered crops

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By LISA SINGHANIA, Associated Press

BATTLE CREEK, Mich. (April 28, 2000 9:32 p.m. EDT http://www.nandotimes.com) - Kellogg Co. shareholders on Friday rejected a proposal to force the cereal maker to stop using genetically altered crops, despite claims that the crops are unsafe and put the company at risk for lawsuits.

"It looks like it might be something in the future, but right now it's not an issue," said Tom Fisher, a retired Kellogg employee and shareholder who was among the 94 percent voting against the proposal.

Kellogg is in the process of removing genetically altered ingredients from its products in Europe and Australia, where there has been increasing consumer backlash over the safety over genetically altered crops.

But the company has declined to do the same in North America, citing a lack of consumer interest and insufficient scientific evidence.

"If we thought there was anything ... that even hinted at these products being unsafe, we would have taken them our of our food a long time ago," chief executive Carlos Gutierrez told shareholders at Friday's meeting.

Sister Judy Schroeder of Sisters of St. Joseph called the vote a victory that their voices were heard.

"I think we have an obligation to future generations to not harm the very fragile balance of the ecosystem," she said.

Greenpeace activists who want Kellogg to adopt a commitment not to use genetically altered products have also picketed the company twice in the past six months.

Kellogg isn't alone in facing biotech critics. A number of other food and beverage companies are being targeted with similar anti-biotech proposals, including General Mills, Quaker Oats and Sara Lee. Coca-Cola's shareholders rejected a similar proposal last week.

The Rev. Gordon Judd, a spokesman for the Kellogg proposal, told Kellogg shareholders the company's use of genetically altered crops could affect more than the company's products - it could affect its bottom line by exposing it to lawsuits and potential damage to its market share and stock price.

Gutierrez told shareholders Friday that he is concerned about the company's declining stock price, though he doesn't attribute it to the use of genetically altered crops.

He said the company is taking steps to build its business: In the last year, Kellogg has sold its frozen bagel business, shut down its oldest Corn Flake facility and acquired a vegetarian foods-maker; there are also new cereals, including a soy-protein mix, and convenience foods, which Gutierrez predicts will continue to grow in importance for the company's future.

"We've made really good progress," he said. "But there's still a lot to do."