Consumer purchasing response to mandatory genetically engineered labeling

• Mandatory labeling of genetically engineered foods reduces sales in the short-run. • These effects are driven in part by a salience effect, not information provision. • Mandatory GE labeling increases short-run demand for non-GMO and organic foods. • Effects are stronger in lower-education areas than in higher-education areas. On January 1, 2022, mandatory genetically engineered (GE) food disclosure labeling became required nationwide in the United States. To date, the only mandatory GE labeling law implemented in the U.S. was Vermont’s Act 120. This article examines the consumer purchasing response to the implementation of Act 120 using store-level scanner data of food purchases. We measure the effects of Act 120 on the grocery store sales of (1) certain GE-labeled products, (2) non-GMO labeled products, and (3) organic products in Vermont. Using a difference-in-differences approach, we compare stores in Vermont to stores in control states before and after the law was passed, implemented, and repealed. We find that during Act 120′s one-month implementation period, sales of GE-labeled soup products decreased by 5.9%, sales of non-GMO labeled products increased by 2.5%, and sales of organic products increased by 1.7%. Areas with lower levels of education saw bigger increases in sales of non-GMO and organic products. Sales trends, however, reversed for all three product categories after Act 120 was repealed. The sales of GE-labeled soup products actually increased by 6% after the law was repealed in the medium term, suggesting improved attitudes towards GE products over time.