McDonald's, Other Fast-Food Chains
Pull Monsanto's Bio-Engineered Potato

By Scott Kilman
Copyright 2000 Wall Street Journal
April 28, 2000

Monsanto Co.'s genetically modified potato is falling victim to the consumer backlash over crop biotechnology.

Fast-food chains such as McDonald's Corp. are quietly telling their french-fry suppliers to stop using the potato from Monsanto, the only biotechnology concern to commercialize a genetically modified spud.ci

So many food concerns are shrinking from the Monsanto potato that J.R. Simplot Co., a major supplier of french fries to McDonald's, is instructing its farmers to stop growing it.

"Virtually all the [fast food] chains have told us they prefer to take nongenetically modified potatoes," said Fred Zerza, spokesman for closely held J.R. Simplot, headquartered in Boise, Idaho.

Monsanto, the St. Louis agricultural unit of Pharmacia Corp., calls its potato "NewLeaf." It is the latest and smallest crop to feel the sting of a growing antibiotechnology campaign in the U.S. and abroad.

Critics have raised enough questions about the environmental and nutritional safety of crop biotechnology that surveys show many U.S. consumers want labels on groceries containing genetically modified ingredients, a move the food industry resists.

American farmers, worried by the controversy, are retreating from the genetically modified seed they raced to embrace in the late 1990s. Such modified plants are easier to grow than their conventional cousins; they make their own insecticides and tolerate exposure to potent weedkillers. But government and industry surveys show that U.S. farmers plan to grow millions fewer acres of genetically modified corn, soybeans and cotton than they did last year.

Potato farmers quickly accepted Monsanto's genetically modified version when it was introduced four years ago. Equipped with a gene from a micro-organism, the NewLeaf plant makes a toxin that repels a major pest called the Colorado Potato Beetle, greatly reducing the need for expensive chemical sprays.

U.S. farmers planted about 50,000 acres of NewLeaf potatoes last year, up from 10,000 acres in 1996. Total U.S. potato production last year was about a million acres.

Now, with food companies shrinking from the genetically modified potato, NewLeaf acreage will likely drop significantly this year.

Fargo, N.D., farmer Ronald Offutt, one of the nation's largest producers of potatoes, said he won't raise any genetically modified spuds this year. Last year, about 20% of the potatoes grown by his company, R.D. Offutt Co., were genetically engineered.

Mr. Offutt said he decided to eliminate the NewLeaf potato after Cincinnati consumer-products giant Procter & Gamble Co. asked how long it would take him to supply the company with only conventional potatoes. Mr. Offutt supplies potato flakes for making P&G's Pringles chips.

P&G declined to comment.

Frito-Lay Co. said Thursday that it is asking its farmers not to grow genetically modified potatoes this year. Frito-Lay makes potato-chip brands Lay's and Ruffles.

Frito-Lay, a Plano, Texas, unit of soft drink giant PepsiCo Inc., told its corn farmers this past winter to stop growing genetically modified varieties for use in its snack products.

Crop biotechnology is a delicate issue for food companies. Most executives believe the technology is safe but many customers are turned off by the idea of genetic manipulation.

NewLeaf potatoes are being sacrificed in large part because they're the easiest genetically modified crop to remove: the vast majority of spuds grown last year were conventional. It's far harder for the food industry to reject genetically modified soybeans, for example, because they represent half of the U.S. crop and are used to make many more food ingredients.

McDonald's declined to talk about its potato policy. A spokesman said the company doesn't comment on its procurement practices.

The Burger King unit of London's Diageo PLC said suppliers have assured it that the french fries it sells aren't made from genetically modified potatoes.

Hardee's, a fast food chain of CKE Restaurants Inc., said it hasn't asked suppliers to stop using genetically modified potatoes. But the chain is considering whether to change its french-fry policy.

Write to Scott Kilman at scott.kilman@wsj.com