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Tuesday October 17 12:51 PM ET Grocers Scramble to Pull Gene-Modified Corn

By Deborah Cohen

CHICAGO (Reuters) - Major U.S. grocery chains, including Kroger Co. (NYSE:KR - news) and Albertson's Inc. (NYSE:ABS - news), scrambled to clear their shelves of recalled products that might contain gene-spliced corn, but few are issuing public statements to let shoppers know which brands to return.

The recall by food maker Mission Foods sparked criticism from one consumer group, which said the grocers may be confusing customers and should be issuing formal recall statements rather than quietly removing products and posting notices in stores.

Late Friday Texas-based Mission Foods, the biggest U.S. maker of tortillas, voluntarily withdrew a range of its Mexican-style products, including yellow taco shells and tortillas, due to concern they might contain a type of gene-spliced corn called StarLink that has not been approved for human consumption.

Mission Foods' sister company, Azteca Milling, on the same day agreed to take back yellow corn flour shipments amid similar concern. Food maker ConAgra Foods Inc. (NYSE:CAG - news) has stopped operations at a Kansas mill because it said it might have received the same type of corn, a variety used only in animal feed that could cause allergies in people.

Mission Foods asked its grocery customers to comply with the recall by removing products it makes for them under its own label and their store brands. However, in a statement declaring its action, the company declined to identify any of the 35 major and independent grocers it counts as customers, citing confidentiality.

``It's privacy,'' said Peter Pitts, a Mission Foods spokesman told Reuters. ``We produce private label for a lot of chains. It's really out of respect.''

The company's handling of the issue appears to have already led to some confusion at one of the nation's largest customers, Boise, Idaho-based Albertson's Inc.

``We were under the impression that Mission did'' disclose the chains' names in its statement, said Jenny Enochson, a spokeswoman for Albertson's. The grocery chain is not issuing a public statement, she said, but it ``reacted immediately'' by pulling product from its shelves.

Excluding its Philadelphia Acme and Chicago Jewel stores, most of Albertson's 2,500 stores carry some of the products, she said.

The omission of brand names and the subsequent reaction by some of the nation's largest U.S. retailers may not be good enough for consumers, according to one consumer groups.

``They should be making it a real recall,'' said David Butler, a research analyst who follows biotechnology for the Yonkers, New York-based Consumer Policy Institute, a division of Consumers Union. ``People might have those house brands in their homes.''

Cincinnati-based Kroger, another leading U.S. grocery chain, also has not issued a public statement, believing its store-level efforts are sufficient to get the word out.

The company said it sells a range of the yellow corn products under the Mission label and its own Kroger brand at the majority of its 2,300 stores. In addition to pulling the affected products, Kroger said it's installing signs in its stores that invite customers to return merchandise for a full refund.

``Store signs usually do a pretty good job of handling recalls,'' said Kroger spokesman Gary Rhodes.

Some chains have issued recall notices. California-based Safeway Inc. (NYSE:SWY - news) withdrew some its corn products last week before the Mission Foods announcement, after a Washington-based advocacy coalition called Genetically Engineered Food Alert said some were found to contain StarLink. Philip Morris Cos.' (NYSE:MO - news) Kraft Foods unit issued a related recall in late September.

Both companies' products were made by Azteca out of the same Texas mill. Azteca Milling and Mission Foods are both units of Mexican food maker Gruma SA (GRUMAB.MX) (NYSE:GMK - news).

Besides Safeway, chains such as North Carolina-based Food Lion, a unit of Delhaize America (NYSE:DZB - news), and Massachusetts-based Shaw's Supermarkets announced their own voluntary recalls on Monday, citing the specific names of their house-branded products in statements released to the media.

A Mission Foods spokeswoman said in an interview on Monday it was too soon to determine the volume of product that is being withdrawn from its retail customers.

With at least 35 chains pulling popular products ranging from taco shells to tortilla chips, consumers have a lot of labels to wade through, said the Consumer Policy Institute's Butler.

``Absolutely all those retailers should be disclosing publicly,'' he said. ``How is the consumer supposed to know and make any kind of choice?''

-- Rachel Gibson (rgibson@hotmail.com), October 17, 2000