In an absolute moral sense, the OP is right. If consumers really want labeling of their food, then they will demand it of from producers and it will happen.
In a practical sense, he is wrong. Most people are not even educated about GMOs; many do not care. That means that people who want to eat healthy are in the minority; the market can be harsh to this kind of minority.
We always say in government, that the whims of the majority should not trample upon the rights of the minority. I feel that even in a free market, people should have a right to know exactly what they are eating. Just because 95% of the people don't care what they stuff in their faces, it is wrong to force other people to operate under that paradigm.
Ultimately, that lack of caring is why these companies are against labeling; they don't want someone to see the label, start to question the product, do research, and then refuse to buy it. By not mandating labeling, companies can hide behind misinformation, false research, smokescreens, etc. Producers also know that if they dig in, consumers will eventually relent and purchase the food without labeling. Just through misinformation, without labeling, it can get very hard to know exactly what you eat; you end up compromising out of sheer exasperation. In addition, the big food producers can all band together and universally decide to not label their food, forcing the consumer in one direction.
Now one could argue that if companies engage in misinformation, collusion, and bad research in order to trick the consumer, government can then call them out on it. They can prosecute them, etc. Individuals can take them to court, etc. Of course, unless you are an anarcho-captalist and believe the government has no role, even in the prevention of fraud. Back to my point, I feel that this method is less efficient. What was most effective in making people know that cigarrettes were bad for you was the government mandates, not the court system.
Plan for eliminating the national debt in 10-20 years:
Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a
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