Loblaws, Canada's largest grocery retailer, has ordered its suppliers to remove or cover by Sept. 1 any labels that identify food as being free of genetically modified ingredients.

The move has angered many of the organic food processors that market their breakfast cereals, pastas and other products in the store's health food department as being free of chemical additives and genetically modified material.

Nature's Path Foods Inc., a British-Columbia-based company that produces organic breakfast cereals, said some Canadian grocery chains pressed the company to alter the labels on its products destined for their shelves. The part of the label that says the products are made without genetically modified organisms has been blacked out with a felt pen.

Spokesman Arran Stephens said some large grocery chains warned the company that its products would be yanked from shelves if it didn't remove the reference to genetically modified organisms.

"We've sort of been bullied into this. We feel it's very important that consumers know if their food has been genetically tampered," Mr. Stephens said, but the company didn't want to risk cutting production and laying off employees.

Mr. Stephens noted that independent food stores and grocery chains in the United States welcome the GMO-free labels. "They're pretty disappointed that we decided to bow to pressure."

Many suppliers are afraid to criticize the giant grocery chain publicly because they fear losing shelf space. But they say privately that they are facing major expense to change labels and could lose sales because consumers won't be able to tell if they are getting GMO-free foods.

In a memo sent to suppliers in late January, Jamie Cooney, director of procurement of health food for Loblaws, said the products of distributors who didn't remove the non-GMO labels could be removed from the grocery chain's shelves.

"It is our position that until such time as a government and-or industry-supported definition of genetic modification exists in Canada we will not support product packaging containing non-GMO claims," the letter, dated Jan. 29, said.

No one was available to comment for Loblaws Tuesday.

In some Loblaws stores across the country the non-GMO stickers have been blacked out or covered by other stickers.

Nadege Adam, health protection director for the Council of Canadians, said she was not aware of other grocery chains taking this position.

"There is absolutely no reason for them [Loblaws] to do this," Ms. Adam said in an interview. "There are no laws preventing anybody from putting a GMO-free claim as long as they can prove it's GMO-free. Loblaws is preventing people from doing this. They are not the government; they have no right to do this."

The federal government has yet to establish a standard or a labelling policy for genetically modified foods, those that come from plants altered to resist pests or herbicides or to produce greater yields.

Ottawa suffered a setback Tuesday in one of its attempts to control labelling of GMO foods when a Quebec judge quashed its bid for an injunction that would stop a beer maker from labelling and advertising its product as "certified GMO-free" by the Canadian Food Inspection Agency.

While the agency regulates genetically modified crops, it doesn't label or test consumer products for the presence of GMOs.

Unibroue Inc. has said that a manufacturer's certificate signed by a government food inspector proved that the CFIA says its product is GMO-free.

The head of the Canadian Health Food Association said Tuesday that the Loblaws policy leaves consumers in the dark about whether they are eating foods containing genetically modified ingredients.

Donna Herringer said the association has been lobbying the federal government for two years to come up with mandatory labelling of foods that contain genetically modified ingredients.

Instead, Agriculture Minister Lyle Vanclief asked a committee to come up with recommendations for voluntary labelling of foods that contain genetically modified ingredients.

Ms. Herringer said that approach will not work because food distributors and retailers won't voluntarily label their products as containing genetically modified material.

"So Canadian consumers continue to be in the dark," Ms. Herringer said in an interview from Vancouver.

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