Genetically modified organisms, consumer scepticism and trade law: implications for the organisation of international supply chains

Given the rapid rates of technological improvements possible, using modern biotechnology, the product life cycle of new genetically modified organisms (GMOs) is likely to be short and, hence, those investing in their development will desire access to the widest international market possible. There is, however, considerable consumer scepticism regarding GMOs, which is being translated into both government policy responses and actions by firms who are near the consumer end of the supply chain. As the licensing of GMOs is likely to vary from country to country and regulatory regimes will differ, firms involved in international supply chains for food products will be affected by the interplay of trade policy and consumer scepticism. All firms, even those not handling GMO products, will be affected because costly new monitoring procedures will be required. These additional monitoring costs suggest that competitive advantage is likely to be conferred on those supply chains which exhibit superior vertical co‐ordination.