(Reuters) - General Mills Inc said on Friday it would begin putting labels on U.S. products that contain genetically engineered ingredients, a move it said was forced by a Vermont law that will require food packages in that state to include such information on July 1.

The U.S. food industry has spent millions of dollars fighting mandatory GMO labeling efforts on state and federal levels, as consumers demand increasing transparency on what exactly is in their food.

Earlier this week, the U.S. Senate blocked a bill that would nullify state and local efforts requiring food companies to label products made with genetically modified organisms, or GMOs. That bill also would give food makers the choice to disclose GMO ingredients.

"Vermont state law requires us to start labeling certain grocery store food packages that contain GMO ingredients or face significant fines," Jeff Harmening, General Mills' chief operating officer of U.S. retail, wrote on the company's blog.

"We can't label our products for only one state without significantly driving up costs for our consumers and we simply will not do that," he wrote.

A General Mills spokeswoman emphasized that the move in no way suggests that the company is backing away from its call for a national standard on GMO labeling.

"We have essentially run out of time," spokeswoman Mary Lynn Carver told Reuters. "We have no other choice. Our supply system doesn't work state-by-state."

Minneapolis-based General Mills is the maker of Cheerios cereal, Nature Valley granola bars, Haagen-Dazs ice cream and many other products.

The Grocery Manufacturers Association, a vocal foe of GMO labeling, on Friday called on the U.S. Senate to get back to work on the issue.

"One small state's law is setting labeling standards for consumers across the country," GMA said in a statement. "This announcement should give new urgency to the need for action on a national law when the Senate returns from its recess in April."

The decision from General Mills comes after high-profile companies such as Whole Foods Market Inc, Chipotle Mexican Grill Inc and Campbell Soup Co have begun requiring GMO labels or abandoning the use of GMOs.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Sandra Maler and Matthew Lewis)