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DRAFT - 3/4/98 PM Wide Operating Companies Position on Use of GeneticallX Modified Ingredients Background Biotechnology has evolved over the centuries from beer, cheese, and wine making, which began over three thousand years ago, to the use of selection and cross-breeding techniques in worldwide agriculture. Modem biotechnology uses the tools of genetic engineering to enhance the beneficial traits of living organisms such as plants and microorganisms to create new or improved materials. This process has resulted in advances in consumer products such as safer and more nutritious foods and new and more effective drugs and other pharmaceutical products. It is also leading to important environmental benefits such as reduced pesticide use resulting from increased insect and disease resistance, reduced fertilizer use, and higher yields which promote sustainable economic development. Genetically modified ingredients already have a significant presence in world commerce. The biotechnology industry continues to develop a wide range of genetically modified materials such as herbicide-and disease-resistant soya and maize. There are numerous other agricultural products in a long development pipeline which will be commercialized over the next five to ten years. Modem biotechnology promises to continue to provide significant advances in the future, and we expect that users of PM products will benefit from many of these advances.

DRAFT - 3/4/98 Pos' io The PM wide operating companies should support the use of modern biotechnology as it will be of significant benefit to society and will bring benefits to the consumers of PM products. Therefore, we should work to preserve the ability to source and use genetically modified ingredients. These ingredients as used in PM's products should not introduce increased safety risks and be functionally equivalent to conventionally sourced ingredients. In all circumstances, products should meet applicable regulatory and labeling requirements in the countries where they are used. If the ingredients as used in our products are determined not to be functionally equivalent, or introduce any allergenicity issues, appropriate labeling should be considered. Otherwise, labeling can unnecessarily mislead consumers and should not be supported. Each operating company should assess the consumer perception of genetically modified materials, and where acceptance is not broadly based, continued production from conventional sourced ingredients should be continued. It should be recognized, however, that this is likely to be a short-term action as separation of conventional from genetically modified materials will not be possible over the longer-term. The PM wide operating companies should play a role within industry associations and other forums, where appropriate, to increase public confidence and acceptance of modern biotechnology.