July 3, 2001
by Maren L. Hickton
While I was reading my e-mail news scoops yesterday, I came
across a little article from Reuters about the fact that ready-to-eat
cereal companies were raising their prices on boxes of cereal
to "offset rising costs."
For some reason, this article just made me just roar with
laughter. Quaker, Kraft (Post Cereals) and Kellogg's said
they were raising their prices - amounting to roughly about
eight or nine cents a box - following the lead of the No.
1 U.S. cereal maker General Mills, Inc., reportedly the result
of increases in fuel, packaging and product development costs.
So just when we think the scam of gasoline shortages and
energy cheaters are exposed, just when we think "we got 'em,"
someone else with an important name like General Mills gets
us for that same eight or nine cents we just saved at the
pump with price rollbacks.
I can't wait for the new packaging. We all know what that
typically means. Instead of the current 20 ounces that I now
get in my low fat, one gram of sugar, as part of a heart-healthy
diet, CHEERIOS, that may reduce my cholesterol - who knows
how many ounces I will get?
They will have to produce new packaging to sell the cereal
that I will likely get less of and have to pay more for, which
is why the marketing costs will undoubtedly be higher. That
part makes sense. I do, however, have some difficulty understanding
the part about contributing to cereal-makers product development
costs. I mean, these companies are cereal KINGS.
So much so, that in the 1970s, there was an antitrust case
concerning the industry's conduct with regard to price fixing
and efforts to deter new brand introductions in the marketplace.
I found it amusing that on the day Microsoft won their antitrust
case appeal, the cereal producers chose to make this price
announcement, if you catch my drift.
Maybe this "product development" money goes to AACC, which
stands for the, "American Association of Cereal Chemists,"
a site I found on the Internet. The American Association of
Cereal Chemists? Wow. This cereal stuff is really big business.
I'm getting hungry just thinking about it. I think I will
take my SUV for a drive down the hill, fill up the gas tank
and get some donuts. I know when I'm licked.