It's no surprise investors may be confused about how General Mills (NYSE:GIS) really feels about genetically modified ingredients.

On the one hand it's heavily financed anti-GMO labeling campaigns at the state level, and though it removed GMOs from its original Cheerios, it said it hadn't really expected them to move the needle after they failed to do just that when higher sales failed to materialize following their introduction earlier this year. As it also says it has no intention of removing GMOs from any of its other products and fully believes they're completely safe for human consumption, it seems clear where it stands.

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A natural, wholesome alternative in cereal. Photo: Steven Hoffman.

It also opposed a shareholder resolution at its recent annual meeting calling for it to go GMO-free. As the great granddaughter of the company's founder said, General Mills already produced GMO-free products in foreign markets where GMOs are banned, so why not do so in the U.S. as well?

On the other hand, it's not cheap or easy to source GMO-free ingredients on the scale needed for a favorite national brand like Cheerios, so the fact it did it to begin with indicates it was done with more than just a passing nod to GMO opponents. And it just agreed to pay $840 million for organic packaged products maker Annie's (NYSE:BNNY)

One policy to rule them all
There is a sense of opposition to state labeling initiatives, in that complying with 50 different sets of rules and regulations would be a costly logistics nightmare. A single, national policy would be more appropriate, much as the one the Grocery Manufacturers Association also endorses. But the GMA says labels should only be required if "our nation's foremost food safety authority" -- the FDA -- says there are health and safety issues. 

While the FDA says it supports voluntary labeling, it also believes they're safe so there would effectively be no labeling achieved. 

Annie, Annie, you OK?
The acquisition of Annie's has ignited a firestorm of protest from the organic company's customers, many of whom bought its products (not all of which were organic) and now feel it's been co-opted by the "enemy."

Like many who felt Monsanto (NYSE:MON) used the acquisition of Beelogics to quash investigations into the biotech's chemicals as a cause of colony collapse disorder that threatens the nation's greatest pollinators, Annie's fans feel its acquisition by General Mills will ultimately silence labeling support. Although the organics company maintains it will continue to contribute to such initiatives, it ought to be interesting to watch the subsidiary and parent company duke it out on opposing sides.

In the wake of the shareholder vote on Tuesday where only 2% of General Mills' investors voted in favor of eliminating GMOs from its products, its CEO Ken Powell seemed to hold out an olive branch to opponents by stating he "strongly supports a federal labeling solution that will provide for consistent labeling requirements across the country."

Company stance
While that's a turnabout from last year when he said he thought GMO labeling was unnecessary, that the ingredients list on a product ought to be reserved for just "important information," which apparently GMO ingredients are not, it also a sign he realizes the trouble General Mills may have in integrating Annie's into its business. He's just trying to smooth over feathers that have been ruffled.

When Kellogg (NYSE:K) acquired Kashi, it faced similar opposition for consumers (for some of the same issues, too) who ended up suing the company for its use of synthetic ingredients and forced Kellogg to remove the words "all natural" from its labels. It also paid $5 million as part of the settlement.

Even if that lawsuit was part of a growing "grocery cart activism" by trial lawyers looking for deep pockets, it still highlights the hurdles General Mills faces.

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Good-for-you junk food? Photo: Annie's. 

Not that Annie's is innocent, as it admitted last year in an interview with The Wall Street Journal, where its CEO John Foraker said others that have been co-opted by grocery giants "have experienced issues" with their core customers.

And though Annie's is largely organic, its products are not exactly healthy. Indeed, in that same interview when asked about its perception of being "organic junk food," Foraker said they've "never positioned Annie's to be a health-food company." 

Despite feints in making some products GMO-free or buying companies that stand in opposition to GMO's, General Mills looks more like it's paying lip service to the concept rather than believing it at its core.

So if anyone remains bewildered by General Mills shifting pronouncements on genetically modified ingredients, be confused no more: it stands by their efficacy and plans to use them throughout its food chain. And should a national, voluntary labeling program ever come into being, one can be reasonably assured it will not be one leading the way to clutter its label with "unimportant information."

[Editor's note: Updated commentary on General Mills' stance for federally mandated labeling.]

Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of Annie's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.