SARA LEE SHAREHOLDERS TURN BACK BID TO BAN GENETICALLY MODIFIED INGREDIENTS

NANCY BRUMBACK

CHICAGO (FNS) -- Sara Lee Corp. shareholders continued the trend at food company annual meetings of defeating stockholder proposals to ban genetically engineered ingredients or to label such products.

At a recent meeting here, a proposal submitted by Harrington Investments, Napa, Calif., and supported by a speaker from Greenpeace, to remove genetically engineered ingredients from all Sara Lee products and to label such products as an interim step drew applause from the audience, but only 8.5% of the total shareholder votes cast.

At a press conference following the annual meeting, C. Steven McMillan, president and CEO, said Sara Lee supports the general industry view that the federal government should not approve products for animal consumption that it does not approve for human consumption, as in the recent corn products recall.

But, he added, neither Sara Lee nor other food companies have had many questions or complaints from consumers about genetically modified products as food ingredients. McMillan also noted it would be expensive and possibly not even possible to test for genetically modified ingredients or to segregate crops.

John Bryan, Sara Lee chairman, said the issue becomes more complicated for the company's meat products division since the animals used are generally fed genetically modified corn and other feeds.

"The debate is bigger in Europe than in the U.S. It could have a major impact if it comes to the U.S.," Bryan said.

McMillan also said at the press conference that Sara Lee's purchase this year of Nestle's North American retail coffee brands -- MJB, Hills Bros. and Chase & Sanborn -- was primarily to strengthen Sara Lee's food service business and to acquire Nestle's new manufacturing plant.

That acquisition, with the earlier purchase of Chock Full o' Nuts, does make Sara Lee the No. 3 player in the retail coffee market, he added, with strong regional positions.

Bryan noted, however, the company does not plan a "major challenge" to the Folgers and Maxwell House brands, which, he said, each have about one-third of the market.

McMillan noted the company is focusing on three core categories: food and beverage, household products and underwear and intimate apparel. New products will drive the growth in those categories, he said, citing Sara Lee Cheesecake Bites as examples of successful recent product introductions.