A Californian ballot proposing the labelling of genetically modified ingredients in food products has been rejected by the state's voters .

With 95% of votes counted, the polls showed 47% voted in favour and 53% against. The contentious measure, proposition 37, would have required GM labels on food sold in supermarkets, and was seen as a testbed case for the US as a whole.

Monsanto and other agribusiness and food companies such as PepsiCo and Nestle spent $45m on advertising and lobbying for the "no" campaign, compared with around $8m for the "yes" campaign, that was largely funded by organic food companies.

Before the vote, the prop 37 supporter Andrew Kimbrell had said he hoped it would be the "hammer we needed to break open the federal roadblock". But those hopes have been dashed with 23,221 of 24,491 precincts in the state reporting votes.

Grant Lundberg, CEO of Lundberg Family Farms, co-chair of the Yes on 37 group, told the San Franciso Chronicle: "Whatever happens tonight, this is a win. Never before have millions of Californians come together to support giving consumers a choice about genetically engineered foods." The yes campaign had attracted several celebrity supporters, such as Gwyneth Paltrow and rap star Pharrell Williams who tweeted on Tuesday night: "vote yes on Prop 37 if you believe you have the right to know what's in your food."

In a statement, Kristin Lynch, Pacific region director of NGO Food & Water, said: "While support for genetically engineered (GE) food labels has never been stronger, the incessant drumbeat of misleading and outright false industry advertising was barely able to defeat this popular measure. While disappointed in the result, we believe that this movement to label GE foods is stronger than ever and we will continue to build a robust national grassroots campaign to push for mandatory labeling across the country."

Supporters had argued consumers have the "right to know" if GM products are in their food, but corporate opponents said the labels would lead to price rises. The American Association for the Advancement of Science (AAAS), which opposed the proposition, has said: "These efforts [to label] are not driven by evidence that GM foods are actually dangerous. Indeed, the science is quite clear: crop improvement by the modern molecular techniques of biotechnology is safe."

Around 90% of US-grown corn and soybean is GM.