The admission, nine days after the Nov. 5 election, came after vote tallies showed the measure lost by 3 percent, The Olympian in Olympia, Wash., reported Thursday.
Trudy Bialac, co-chair of the "Yes on 522" campaign, promised in a statement that "this fight isn't over. We will be back in 2016 to challenge and defeat the out-of-state corporations standing in the way of our right to know," she said.
Yes on 522's statement noted the initiative received 49 percent of the vote despite a low voter turnout in an off-year election and being outspent by a margin of 3-to-1.
Out-of-state food and agribusiness firms spent $20.13 million to defeat the proposition. The largest donor was the Grocery Manufacturers Association, whose members contributed $11 million. Monsanto, which makes many GMO products, contributed more than $5 million.
In contrast, Yes on 522 raised about $8 million and spent $7 million.
The Washington attorney general has sued the GMA for allegedly collecting donations illegally before registering as a political action committee.
The same industries defeated a similar labeling bill in California in 2012.