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The Breakfast Club
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.


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