‘Heartwise’ Cereal Barred by Texas in Labeling Dispute

Texas consumers will soon have one less breakfast choice on their grocery shelves. The state has embargoed Kellogg Co.’s controversial cereal Heartwise in a protracted battle over labeling.

The Texas Health Department on Tuesday ordered warehouses to halt distribution of the psyllium-based cereal, sending health inspectors out to seven or eight wholesalers, where they plastered boxes of the product with red-lettered labels that warned: “DETAINED. Do not remove under penalty of law.”

Psyllium, a fibrous grain also known as fleawort, has been described as having the potential to reduce cholesterol levels. It also is an ingredient in over-the-counter laxatives such as Metamucil.

Heartwise boxes do not directly claim that the cereal will lower blood cholesterol levels; they do say that eating foods high in soluble fiber--such as Heartwise--along with a low-fat diet will help to lower cholesterol.

“The labeling of the product, in our opinion, makes the product an unapproved new drug,” Dan Sowards, chief of the Texas Health Department’s food branch, said in a telephone interview. “The other serious concern is the allergic reaction that individuals might have to psyllium, one of the major ingredients.”

Kellogg officials call the Texas claims ridiculous, the allergy threat a “smoke screen” and the embargo unwarranted. Texas is the only state that has taken action against Heartwise, Kellogg said.

“There’s been no more allergic reaction from psyllium than there has been from other grains like wheat or what people have experienced from peanuts or may experience from shellfish,” said Joseph M. Stewart, senior vice president for corporate affairs. “This is a part of the state-federal power struggle over who’s going to regulate. That’s what we’re caught up in.”

The ban prohibits more cereal from being distributed by wholesalers, but Texas officials did not order Heartwise to be stripped from stores. The embargo’s duration is “up to Kellogg or the courts,” Sowards said.

Tuesday’s embargo came five days after Kellogg filed suit in federal court in Dallas in an attempt to keep the Texas attorney general and health department from acting against the labeling or distribution of Heartwise in Texas.

Kellogg sued after the breakdown of more than a month of negotiations with Texas health officials. The two parties said they were close to reaching agreement on labeling changes on the Heartwise box--changes that would have warned of the allergy threat.

Sowards said talks broke down when Kellogg refused to put its promises in writing. Kellogg said the parties came to an impasse when Texas threatened the company with a $25,000 civil penalty.

One analyst called the imbroglio a “rooster fight” between two headstrong opponents.

“You have two roosters here, and two roosters fight,” said John McMillin, a food analyst for Prudential-Bache Securities in New York. “Texas doesn’t want to back down on this issue. Kellogg doesn’t want to back down either.”

McMillin said Texas officials do have a point: “With a name like Heartwise, is that making medical claims?” But an embargo, he said, is an overreaction and the ensuing bad publicity could cut into Heartwise’s tiny market share, which McMillin placed at less than half of 1% of the $7-billion ready-to-eat breakfast food industry.

“Texas is not the biggest market in the world . . . but it might be the nail in the coffin,” he said.