Why does antimatter anihilate upon contact with matter?

Good question. When a particle meets its antiparticle, they are both annihilated and converted into a photon with the energy equivalent of their combined mass. So a proton plus an antiproton gives a gamma ray photon, but if a proton meets an anti neutron, nothing interesting happens. If a hydrogen atom (proton + electron) meets an anti helium atom (two anti electrons, two anti protons and two anti neutrons), then a proton and its antiparticle annihilate to give a photon, an electron and its antiparticle annihilate to give another photon, and you've got an anti electron (positron), an anti proton and two anti neutrons left over. A photon of course is its own anti particle. So the photons given off by antimatter, for instance due to incandescence, are identical to ordinary photons. Gravitational effects of antimatter are the same as for ordinary matter. So if you observed a lump of suspected antimatter in space, the only safe, practicable way to verify it would be to zap it with protons or electrons and see if any gamma ray photons were given off.