fresh atlantic salmon lie on...
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By Vanessa Wong

An environmental group made waves this week with word that Kroger (KR) and Safeway (SWY), the second- and fourth-largest U.S. grocery chains, respectively, had agreed not to sell genetically engineered salmon. These futuristic fish aren't yet commercially available. Maybe that's why the task of heralding the news was left to Friends of the Earth.

The list of retailers that won't touch modified salmon now includes big names such as Target (TGT), H-E-B, Whole Foods (WFM) and Trader Joe's. But what about Walmart (WMT)? The chain, which accounts for 15 percent of fresh food sales in the U.S, isn't saying.

Walmart is the country's largest supermarket chain, with 3,400 stores, far in front of No. 2 Kroger at 2,400, according to Progressive Grocer. Due to its vast scale, Walmart can have an outsize impact on both consumer behavior and the market for any product. For example, Walmart has been adjusting its inventory based on changing consumer concerns. Last week it notified suppliers they will have to reformulate products like household cleaners, soaps and cosmetics to remove harmful chemicals. In the food section, meanwhile, stores also carry organic foods and hormone-free milk.

Genetically engineered salmon hasn't been approved for sale by the Food and Drug Administration. Over the past year, however, advocacy groups have been preemptively pressing retailers not to carry the fish, claiming the salmon would harm the environment and threaten other species if they escape from fish farms into open waters. Activists are asking Costco (COST) to make a commitment, said Dana Perls, a policy campaigner at Friends of the Earth. "We will also be reaching out to Walmart again and ask it to join the rest of the grocery store leaders," she said in an e-mail.

Sterile, Fast-Growing Females, in Development Since 1995

The fish in question, AquAdvantage salmon, was created by biotech company AquaBounty Technologies. The specimen is entirely female and sterile and can grow to market size in about half the time as typical salmon. The company has been trying to get it into the food supply since 1995. "An entire generation of people has grown up while we wait for approval," says AquaBounty spokesman Dave Conley.

In preliminary findings released in 2012, the FDA suggested that biotech salmon raised under specific conditions would not have a significant impact on the U.S. environment -- with emphasis on U.S. AquaBounty's plan would have the salmon eggs produced on Canada's Prince Edward Island and then grown at a land-based facility in Panama. The agency said the areas most likely to be affected are outside the U.S., and the National Environmental Policy Act "does not require an analysis of environmental effects in foreign sovereign countries, [and] effects on the local environments of Canada and Panama have not been considered and evaluated." The probability of a salmon escape followed by reproduction in the wild "is extremely remote," the FDA found.

Friends of the Earth sees the risks differently. "The FDA's safety assessment was inadequate," Perls said, "and research shows that GMO salmon could become invasive, putting species such as wild salmon at risk of extinction."

AquaBounty's Conley says big grocers have been intimidated by activist groups about a product that, if approved by the FDA, is still years away from getting to the supermarket and would only represent a tiny fraction of salmon sales. "It's disappointing, really," he says, "because we believe we have a good product, a safe product, and we don't think people have anything to be afraid of."

As large grocers line up against genetically engineered salmon, the market potential for AquaBounty's product and others like it is shrinking even before the first retail sale. Biotech seafood startups will be watching Walmart to see if futuristic fish still have a big future.

Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.

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