Margarine producers will be some of the worst affected, with sourcing of non-GM ingredients likely to add more than 16 per cent to raw materials costs in the next one to three years, says a new report commissioned by Agricultural Biotechnology Europe (ABE).
This increase, the report says, means margarine producers could be paying an extra €85m in raw materials costs to sustain non-GM policies - currently thought to cover about 70 per cent of EU margarine production.
Such a price rise could put intense pressure on producers' profit margins as they also battle against soaring oil (plastics) and energy costs, as well as the supply chain squeeze from retailers.
A major problem is the declining global supply of non-GM ingredients in the key soybean and derivative sector, notably now Brazil has begun planting GM soybeans. GM soybeans accounted for 23 per cent of total production in Brazil in 2004.
This situation is forecast to significantly raise costs for going non-GM, particularly in animal feed.
The report says sourcing non-GM soymeal and soy oil for animal feed is already about 10 and 13 per cent more expensive respectively than sourcing GM. The gap for both may widen to as much as 25 per cent in the next three years.
More problems are likely to emerge in enzyme production, the researchers say, as the European Commission looks to create a new Enzyme Directive.
This means more enzymes would be defined as additives, forcing producers to include them on ingredients labels. Products containing a number of the GM-derived enzymes currently used in bakery, dairy and other sectors may therefore fall foul of consumers' anti-GM attitudes.
The anti-GM climate within the EU as a whole was also highlighted as a major obstacle to future enzyme development within the bloc, according to a recent report on the European enzymes market by Frost & Sullivan.
The European Commission has so far given its approval to several GM products, including sweetcorn, oilseed and one soybean type.
Yet, the European Council of Ministers has consistently failed to reach a decision over GM ingredients. The body last week failed again to agree on the Commission's latest approval, for GM maize 1507, after several countries blocked the move.
The indecision means the Commission can now authorise the maize if it chooses. Yet the anti-GM feeling among European consumers still presents a serious dilemma for the food industry.
Earlier this year, a survey polled by the UK's consumer magazine Which? found that Britons feel even more strongly about GM foods than they did two years ago.
More than six out of 10 people (61 per cent) were concerned about the use of GM material in food production - up from 56 per cent in 2002. Around 68 per cent wanted manufacturers to go one step further and source non-GM animal feed.
Some major food producers operating in Europe, such as Heinz, and nearly all major UK supermarkets, have begun to use non-GM status as a marketing tool in itself.
But, the ABE-commissioned report points out that "to date, consumers have rarely been given the option of a choice between GM and non-GM alternatives of the same product or faced price differentials between the two".