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August 07, 2008

Monsanto's Step Back

Monsanto's announcement yesterday that it was selling its much-maligned milk hormone business was a watershed event for those critical of the biotech industry. Monsanto decided to cut its losses in the milk business and focus on counting all the money they're making selling Roundup herbicide and biotech seeds. It's a testament to the company's stubbornness that it took 15 years to finally drop the product, despite polls showing that 80 percent of consumers didn't want their milk from cows injected with the hormone.

Recombinant bovine growth hormone (rBGH), marketed as Posilac, was one of the first agriculture biotech products on the market when it was introduced in 1993. It was marketed to dairy farmers as a way to increase milk production. The downside was that it also increased udder infections, forcing farmers to increase their antibiotic use, which, among other effects, increased the potential to create antibiotic-resistant bacteria. Additionally, the hormone raised levels of IGF-1 in cows and cow's milk. There is a concern that IGF-1 levels in milk might be passed on to humans, and increase the risk of certain types of cancer. Healthcare Without Harm has a good backgrounder on health concerns with rBGH.

When rBGH-produced milk hit the market it sparked outrage from many consumer groups. There were milk dumps in front of grocery stores. Monsanto fought back aggressively in the media. Public relations firms attempted to infiltrate and spy on consumer groups opposed to rBGH.

But ultimately what killed rBGH was consumer labeling. Consumers wanted rBGH-free milk and were willing to pay for it. Monsanto took extraordinary steps to keep consumers in the dark about rBGH-free milk. Last year, Monsanto went to the FDA and FTC asking that dairy companies stop using "deceptive advertizing" in labeling their milk hormone-free. Earlier this year, the company took the battle to the states, trying to go state-by-state to restrict labeling. Consumers Union was a leader in blocking this effort. In the meantime, Monsanto sued companies directly who labeled their milk BGH-free.

But the consumers' voice was too powerful and it carried up the food chain. Companies like Wal-Mart, Starbucks, Kroger, and Dean Foods began to sell milk only from cows that were not treated with artificial hormones. Many of these companies do business around the world where every other major industrialized country had rejected rBGH for use, including Canada, all of Europe and Japan.

We've written a lot here about market power and concerns that U.S. agribusiness has too much. Score one for the market power of consumers.

Ben Lilliston

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