Kraft (KFT-NYSE) Investors Raise Concerns About Genetically Engineered Foods At Shareholder Meeting
Press Release, April 22, 2003

East Hanover, NJ -- Kraft's continued use of genetically engineered ingredients was a major topic of concern today among investors inside Kraft's annual shareholders meeting.

Kraft shareholders, including actor Chevy Chase and his wife Jayni Chase, spoke out at the meeting raising concerns about the public health, environmental, and financial risks posed by genetically engineered ingredients.

Chevy Chase raised the issue of biopharmaceuticals-food crops genetically engineered to produce prescription drugs and industrial chemicals-and the risks these pose to Kraft products. Mr. Chase stated, "I don't want my family to accidentally ingest a pig vaccine when they eat an Oreo, or inadvertently eat a blood-clotter when they pour a bowl of Alpha-Bits." He also asked Kraft executives, "Given the serious risks posed by biopharm crops and other genetically engineered crops, is Kraft seriously considering removing genetically engineered ingredients from its foods? And, if not, would you please consider doing so?"

In November, disaster was narrowly averted when the USDA found 500,000 bushels of soybeans headed for the food supply to be contaminated with biopharm corn.

Concerns about the financial risks genetically engineered foods pose to investors were also raised. Rachel Heller, a representative of Green Century Capital Management, asked during the meeting if there are financial benefits to the company and shareholders associated with the continued use of genetically engineered ingredients. Ms. Heller also stated, "continued use of genetically engineered foods expose investors to unnecessary financial risk. Another incident like the StarLink contamination could have devastating impacts on Kraft's bottom line and share value."

The financial risks of genetically engineered foods became evident with contamination of the food supply by StarLink in 2000, which is estimated to have cost the food industry billions of dollars. StarLink is a variety of genetically engineered corn that was not approved for human consumption because of concerns that it might trigger allergic reactions. StarLink was first discovered in Kraft's Taco Bell brand taco shells.

Kraft was also called to task on addressing the issue of genetically engineered foods with Altria's new Social Responsibility program. "Many students at top universities are saying that they will not work for Kraft because of itsuse of genetically engineered ingredients," stated Rebecca O'Malley, program director for ecopledge.com. "If Kraft and Altria want to be seen as socially responsible companies, the issue of genetically engineered foods must be addressed."

Last week, a report was released entitled, "Risky Business: Financial Risks that Genetically Engineered Foods Pose to Kraft Foods, Inc. and Shareholders." The report reveals that Kraft's use of genetically engineered ingredients poses risk of product recalls and liability lawsuits, loss of competitive advantage, consumer rejection of Kraft's products, and damage to reputation resulting from increased controversy surrounding these foods.

The report also makes the case that genetically engineered foods do not offer financial benefits to Kraft or marketable benefits to consumers. Genetically engineered crops may even cost more to produce than non-genetically engineered counterparts.

"Continued use of genetically engineered ingredients is a no-win situation for Kraft and shareholders," stated Kate Madigan, advocate for the state Public Interest Research Groups and author of the report. "Many food companies have already removed these ingredients from their products to protect consumers and investors. Kraft should do the same."

Contact: Kate Madigan, State PIRGs, cell: 323-251-2927; Rachel Heller, Green Century Capital Management, 617-482-0800; Rebecca O'Malley, ecopledge.com, 213-251-3680x302

The State Public Interest Research Groups (PIRGs) are a nationwide network of non-profit public interest advocacy groups.

Ecopledge.com is a non-profit organization that organizes students, consumers, and investors to influence corporate social and environmental responsibility.